Published by Global Banking & Finance Review®
Posted on June 12, 2025
3 min readLast updated: January 23, 2026
Add as preferred source on GoogleOil prices dipped as traders evaluated Middle East tensions, with potential supply disruptions on the horizon. Brent and WTI saw minor declines.
By Shariq Khan
NEW YORK (Reuters) -Oil prices settled slightly lower on Thursday as traders booked profits from a 4% rally in the prior session, driven by concerns that worsening tensions in the Middle East could cause supply disruptions.
Brent crude futures settled down 41 cents, or 0.6%, at $69.36 a barrel. U.S. West Texas Intermediate crude fell 11 cents, or 0.2%, to settle at $67.97 a barrel.
U.S. President Donald Trump on Thursday said an Israeli strike on Iran "could very well happen," but added that he would not call it imminent and prefers to avoid conflict.
The U.S. had earlier decided to move personnel out of the Middle East, sending both crude oil benchmarks up more than 4% to their highest since early April on Wednesday.
The surge put the market in overbought territory based on several technical indicators, so it was likely due for a brief correction, StoneX Energy analyst Alex Hodes said.
U.S. and Iranian officials were scheduled to hold a sixth round of talks on Tehran's uranium enrichment programme in Oman on Sunday, according to officials from both countries and their Omani mediators.
Trump has repeatedly threatened strikes against Iran if the nuclear talks fail to reach an agreement. Tehran, which asserts its nuclear activity is for peaceful purposes, has said it would retaliate against strikes by hitting U.S. bases in the region.
Rising tensions in the region have oil traders worried about possible supply disruptions.
Britain's maritime agency warned on Wednesday that increased tensions in the Middle East may escalate military activity and impact shipping in critical waterways.
"For the oil market, the absolute nightmare is a closure of the Strait of Hormuz," Arne Rasmussen, an analyst at Global Risk Management, said in a LinkedIn post.
"If Iran blocks this narrow chokepoint, it could affect up to 20% of global oil flows," he added.
JPMorgan said oil prices could surge to $120-$130 a barrel if the Strait of Hormuz were to be shut, a scenario the bank considered to be severe but a low risk.
Still, oil traders were growing cautious.
"We are still higher than two days ago as some short investors prefer to stay on the sidelines amid the uncertainty," said Giovanni Staunovo, an analyst at UBS.
U.S. special envoy Steve Witkoff plans to meet Iranian Foreign Minister Abbas Araghchi in Oman on Sunday to discuss Iran's response to a U.S. proposal for a deal.
The U.N. nuclear watchdog's 35-nation Board of Governors declared Iran in breach of its non-proliferation obligations on Thursday for the first time in almost 20 years, raising the prospect of reporting it to the U.N. Security Council.
(Additional reporting by Emily Chow in Singapore; Editing by Sonali Paul, Christopher Cushing, Sharon Singleton, Jan Harvey, Paul Simao, David Gregorio and Cynthia Osterman)
Oil prices settled slightly lower as traders booked profits from a previous 4% rally, influenced by concerns over escalating tensions in the Middle East.
The Strait of Hormuz is critical as it could affect up to 20% of global oil flows if Iran were to block this chokepoint, raising significant concerns among oil traders.
JPMorgan stated that oil prices could surge to $120-$130 a barrel if the Strait of Hormuz were to be shut, although they considered this scenario to be severe but a low risk.
Traders are growing cautious, with some short investors preferring to stay on the sidelines amid the uncertainty surrounding geopolitical tensions.
The U.S. decided to move personnel out of the Middle East, which initially caused both crude oil benchmarks to rise more than 4% before settling lower.
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