Oil falls as investors weigh chance of US intervention in Iran-Israel conflict
Iranian flags fly as fire and smoke from an Israeli attack on Sharan Oil depot, in Tehran on June 15, 2025. – Reuters
BEIJING: Oil prices fell on Thursday with investors hesitating to take new positions after President Donald Trump gave mixed signals on potential U.S. involvement in the Israel-Iran conflict, while the Federal Reserve left interest rates unchanged.
Brent crude futures fell 20 cents, or 0.26%, to $76.5 a barrel by 0421 GMT, after gaining 0.3% in the previous session when high volatility saw prices fall as much as 2.7%.
U.S. West Texas Intermediate crude for July fell 4 cents, or 0.05% to $75.10 a barrel, after settling up 0.4% in the previous when it dropped as much as 2.4%.
The July contract expires on Friday and the more active August contract was down 8 cents, or 0.11%, to $73.42 a barrel.
There is still a "healthy risk premium baked into the price as traders await to see whether the next stage of the Israel-Iran conflict is a U.S. strike or peace talks", Tony Sycamore, market analyst at IG, said in a client note.
Goldman Sachs on Wednesday said a geopolitical risk premium of about $10 a barrel is justified given lower Iranian supply and risk of wider disruption that could push Brent crude above $90.
Trump on Wednesday told reporters that he may or may not decide whether the U.S. will join Israel in its attacks on Iran. The conflict stretched into its seventh day on Thursday.
Direct U.S. involvement would widen the conflict, putting energy infrastructure in the region at higher risk of attack, analysts said.
As a result of the unpredictability that has long characterised Trump's foreign policy, "markets remain jittery, awaiting firmer signals that could influence global oil supply and regional stability," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries, extracting about 3.3 million barrels per day (bpd) of crude oil.
About 19 million bpd of oil and oil products move through the Strait of Hormuz along Iran's southern coast and there is widespread concern the fighting could disrupt trade flows.
Separately, the U.S. Federal Reserve kept its interest rates steady on Wednesday but pencilled in two cuts by the end of the year. Chair Jerome Powell said cuts would be "data-dependent" and that it expects accelerated consumer inflation from Trump's planned import tariffs.
Lower interest rates would stimulate the economy, and as a result demand for oil, but that could exacerbate inflation. - Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
34 minutes ago
- Malay Mail
Putin, Xi ‘strongly condemn' Israeli strikes on Iran, stress diplomacy over force
MOSCOW, June 19 — Russian President Vladimir Putin and his Chinese counterpart Xi Jinping today strongly condemned Israeli attacks on Iran in a phone call and stressed the need for a diplomatic solution, Moscow and Beijing said. Israel has launched an unprecedented wave of strikes at Iran that prompted Tehran to respond with its own attacks with missiles and drones. Putin and Xi 'strongly condemn Israel's actions', Kremlin aide Yuri Ushakov told reporters after the call. He added that Moscow and Beijing believed the end to the hostilities 'should be achieved exclusively by political and diplomatic means'. Xi told Putin that a ceasefire was the 'top priority' and urged Israel to halt its attacks, Chinese state media reported. 'Promoting a ceasefire and cessation of hostilities is the top priority. Armed force is not the correct way to resolve international disputes,' Xi said, according to China's state news agency Xinhua. 'Parties to the conflict, especially Israel, should cease hostilities as soon as possible to prevent a cyclical escalation and resolutely avoid the spillover of the war,' he added. Putin is pitching himself as a mediator between the warring sides. Russia is close to Iran, having boosted military ties amid its offensive on Ukraine, but also strives for good relations with Israel. Last week, Putin held phone calls with Israeli Prime Minister Benjamin Netanyahu and Iranian President Masoud Pezeshkian, offering himself as a peacemaker. The Kremlin said that Xi had spoken 'in favour of such mediation, since he believes that it could serve to de-escalate the current situation', Ushakov said. But Western leaders, including US President Donald Trump and France's Emmanuel Macron have pushed back against the idea of Putin trying to mediate the conflict amid his own Ukraine offensive. 'He actually offered to help mediate, I said: 'do me a favour, mediate your own',' Trump told reporters yesterday about Putin's efforts. 'Let's mediate Russia first, okay? I said, Vladimir, let's mediate Russia first, you can worry about this later.' — AFP
Malay Mail
an hour ago
- Malay Mail
Higher Education Ministry monitoring safety of Malaysian students in Iran, says minister
LANGKAWI, June 19 — The Ministry of Higher Education (MOHE) will continue to closely monitor Malaysian students currently in Iran to ensure their safety and well-being. Its minister Datuk Seri Zambry Abdul Kadir said that MOHE had so far identified seven Malaysian students currently in Iran, although the exact number remains uncertain as some are there under self-sponsorship. 'We will continue to monitor the situation closely, and our team will work in coordination with the Foreign Ministry. Based on the information available during my visit to Iran a few weeks ago, we identified seven Malaysian students there,' he said. 'Even though they are not registered with MOHE, as Malaysians, it is our responsibility to be concerned for their well-being and ensure we know their whereabouts. We will continue to monitor the situation,' he said in a press conference after the Asean Higher Education Ministers' Roundtable Conference here today. Yesterday, MOHE urged all Malaysian students currently in Iran to leave the country immediately, following the escalating conflict in the region. Deputy Higher Education Minister Datuk Mustapha Sakmud, reportedly said that Malaysian students had been identified as studying in Qom and Isfahan. — Bernama
New Straits Times
an hour ago
- New Straits Times
No fuel price hike despite global oil surge, says Anwar
ISKANDAR PUTERI: Prime Minister Datuk Seri Anwar Ibrahim said the government will maintain current fuel prices, despite a global surge driven by Iran-Israel tensions. Speaking here after attending the Organisational Strengthening Seminar and Meeting with the Keadilan President, he said the move is intended to reduce the impact on the public and the national economy. "Oil prices fluctuate. Right now, global prices are somewhat low, but when they rise, they do so sharply. However, the government is not raising fuel prices because of its impact on the people," he said. Earlier, media reports suggested global oil prices could hit US$130 (RM610) per barrel if Iran closes the Strait of Hormuz, according to Sputnik and RIA Novosti citing Turkiye's Hurriyet. Iran's parliamentary National Security and Foreign Policy Committee member Esmail Kowsari reportedly said Tehran is considering closing the strait in response to Israeli attacks. The Strait handles 20 per cent of global oil shipments and 80 per cent of Iran, Saudi Arabia and UAE's oil and LNG trade. The report added that the outcome of the Iran-Israel conflict on the economy would depend on the duration and intensity of the escalation.
