Oil prices fell on Thursday after giving up part of the sharp gains recorded a day earlier, as traders turned their attention from escalating tensions in the Middle East to the flow of oil supplies through the Gulf.
Brent crude dropped 96 cents to US$89.78 a barrel, while U.S. West Texas Intermediate (WTI) fell 64 cents to US$83.82.
The decline came after oil prices jumped sharply on Wednesday following fresh military action involving the United States, Iran and Saudi Arabia.
Conflict sparked the rally
Oil prices surged after U.S. President Donald Trump warned that the United States would respond “very hard” to an Iranian missile attack on a U.S. military base in Jordan.
The market also reacted after the United States and Saudi Arabia launched strikes on Iran-backed groups in Iraq. Later, U.S. forces also carried out attacks on targets inside Iran, increasing concerns that the conflict could disrupt global oil supplies.
Supply remains the key factor
Despite the rising tensions, oil continues to leave the Gulf region.
Analysts say this is one of the main reasons prices gave back some of their gains. Although the Strait of Hormuz remains largely closed, alternative supply routes continue to move crude to international markets.
Research firm Rystad Energy estimates that around 13 million barrels of oil a day are still reaching global buyers from the Gulf.
Some shipments also continue through alternative routes despite disruptions in the Bab el-Mandeb Strait.
Why businesses should watch oil prices
Oil prices affect much more than fuel costs.
Higher crude prices can increase transport costs, raise manufacturing expenses and push up the prices of imported goods. They can also influence inflation and operating costs for businesses around the world.
For now, the market appears to be watching oil supply more closely than military headlines. As long as crude continues to reach global markets, analysts believe sharp price increases could remain limited despite ongoing tensions in the Middle East.
Last modified: July 30, 2026
