Brent Crude Retreats From July 2024 Highs

Brent crude oil futures fell toward $81 per barrel on Wednesday, retreating from July 2024 highs and posting their first decline since the onset of direct conflict, as government pledges to safeguard trade routes tempered immediate supply fears. The crisis has effectively halted commercial traffic through the Strait of Hormuz, with the IRGC warning it would “set ablaze” any vessel attempting transit. Seeking to contain a broader energy shock, President Trump instructed the DFC to offer political risk insurance at reasonable rates, while Treasury Secretary Bessent signaled a series of measures to stabilize the Gulf. Despite US promises of naval escorts, major shipowners remain anchored, preserving a sizable geopolitical risk premium as markets await an operational federal insurance backstop. Meanwhile, Iranian UN Ambassador Ali Bahreini denied any indirect talks with Washington, saying the only remaining language is defense after strikes that killed senior Iranian leaders.

Brent crude oil futures pulled back toward $82 per barrel on Wednesday after a rally that had pushed prices to the highest since July 2024, driven by concerns over the Middle East conflict disrupting global energy flows. Gains eased following reports that Iranian intelligence officials had indirectly contacted the US via another country’s spy agency to discuss terms for ending the conflict, raising hopes of a potential de-escalation. The crisis has already forced major producers to halt output and severely limited traffic through the Strait of Hormuz. US President Donald Trump said the US International Development Finance Corporation would provide insurance for vessels and naval escorts if needed to secure energy shipments. Meanwhile, Saudi Arabia reported an attempted attack on its Ras Tanura refinery and confirmed plans to divert supplies to the Red Sea to maintain operations, keeping markets focused on regional infrastructure risks.

Brent crude oil futures climbed toward $84 per barrel on Wednesday, the highest since July 2024 and extending its advance for a fifth session, as the Iran crisis disrupted supply in the key producing region. Hostilities entered a fifth day, with Israeli and US strikes on Iran triggering retaliatory attacks on regional energy infrastructure. Iraq, a major crude producer, cut output by about 1.5 million bpd, roughly half its production, due to storage limits and blocked exports, with the risk of halting nearly 3 million bpd if exports do not resume. Iran also targeted tankers in the Strait of Hormuz, a route for about 20% of global oil and LNG, leaving traffic halted for a fourth day. However, gains were capped as President Donald Trump said the US would insure vessels to maintain energy and trade flow, with naval escorts available if needed. Meanwhile, API data showed US crude inventories rose 5.6 million barrels last week, exceeding expectations for a 2.19 million-barrel build.