Iran launches drone, missile strikes at U.S. bases in Kuwait

Oil prices dipped on Thursday as investors grappled with the uncertainty surrounding a potential military clash between the United States and Iran, which could disrupt Middle East supplies. Brent crude futures slipped 43 cents, or 0.45%, to $95.2 a barrel, while US West Texas Intermediate crude futures fell 24 cents, or 0.26%, to $90.77.

The latest confrontations marked the most significant exchange of fire between the two nations since July, with the conflict now in its seventh month. Brent and WTI prices fluctuated between gains of up to $2 a barrel and losses of $1 a barrel during the previous trading session, reaching their highest levels since July 24. The retreat in prices came as tentative signs emerged that the latest escalation might be easing, with no confirmed exchanges of fire since around midday Wednesday Sydney time.

IG analyst Tony Sycamore noted in a note that US President Donald Trump had indicated the US campaign against Iran would not persist "too long" and that US forces had targeted Iran's radar and missile systems. Trump also mentioned the destruction of new equipment along the Strait of Hormuz, stating that the US was prepared for additional strikes at any time.

If the recent easing persists, Sycamore suggested, oil moving through the Strait via dark-ship transits and ship-to-ship transfers could return to levels seen at the end of last week. Shipping data from Kpler revealed that four commodity vessels transited the Strait of Hormuz on Wednesday, below the 10-day average of around 13. Iran also added more vessels to its list of non-compliant entities, subject to fines or seizure if they attempt to sail through the strait.

The US reported that 17 million barrels of oil transited the Strait of Hormuz on Monday, the highest volume since the US-Israeli war on Iran began.