Strait of Hormuz Closed? Oil Prices Dip Amid Iran Tensions

Oil prices saw a decrease of about 1% on Thursday, reversing earlier gains triggered by escalating U.S.-Iran hostilities. Tehran declared the Strait of Hormuz closed, asserting that any vessel attempting passage would be fired upon. This announcement followed U.S. strikes against Iran, with President Trump vowing further attacks unless a peace deal is reached.

However, conflicting information emerged as the U.S. military reported that commercial ships continued to transit the Strait, and no U.S. warships had been struck. Three Iranian sources indicated that preliminary deal negotiations have intensified, focusing on a mechanism for releasing frozen Iranian funds. Additionally, weaker demand from China, evidenced by falling gasoline and diesel use and lower crude imports, is also helping to contain the oil rally.