Oil prices set for second weekly decline as Trump to stay with Iran blockade

Oil prices have experienced a second weekly decline as the United States plans to maintain its blockade of Iranian oil shipments, diminishing the likelihood of large-scale conflict in the Middle East that could disrupt supplies. Brent futures remained relatively stable, slipping by only 1 cent to $95.41 a barrel, while West Texas Intermediate (WTI) fell by 20 cents, or 0.25%, to $88.52 a barrel.

A series of market swings, including hopes for improved US-Israel relations with Iran and attacks on Saudi infrastructure by Iran-backed Houthis, contributed to the volatility. Brent oil prices are projected to decline by 2.4% this week, following a 16% drop the previous week, while WTI is expected to fall by 2.5%, after an 13% reduction previously.

President Donald Trump's decision to continue with the blockade on Iranian oil shipments and economic sanctions, despite the potential for renewed conflict, has played a significant role in the recent price declines. Traders appear to be cautious about the situation in the Middle East, leading to a well-priced market, according to Chris Brankin, a global advisor at MiTrade brokerage in Melbourne.

Despite the easing prices, risks remain for oil shipments passing through the Strait of Hormuz, a critical waterway for crude exports from the Middle East. Recent attacks by Iran-backed Houthis on oil tankers and infrastructure in Saudi Arabia have further pressured oil prices. Additionally, a rise in US crude and fuel inventories, driven by softer demand for refined products and an increase in oil imports, has also contributed to the decline in oil prices.