FILE PHOTO: An oil tanker is being loaded at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. Picture taken May 21, 2018.
Ahmed Jadallah | Reuters
Crude oil futures fell slightly on Thursday, after spiking sharply in the previous session on fears that Israel and Iran are on the brink of war.
U.S. West Texas Intermediate fell 11 cents, or 0.16%, to close at $68.04 a barrel. Global benchmark Brent lost 41 cents, or 0.59%, to settle at $69.36 per barrel.
Oil prices jumped more than 4% on Wednesday as fears of a conflict that would disrupt crude supplies suddenly swept the market.
Israel is considering taking military action against Iran without U.S. support in the coming days, five people with knowledge of the situation told NBC News. President Donald Trump told reporters Thursday that an attack could happen, though he would not call it imminent.
“I don’t want to say it’s imminent but it looks like something that could very well happen,” Trump said during an event at the White House. “Look, it’s very simple, not complicated. Iran cannot have a nuclear weapon.”
The U.S. State Department, meanwhile, has ordered the departure of nonessential personnel from Iraq. The Pentagon authorized the voluntary departure of military members’ families from the Middle East.
The departures come after Iran’s defense minister warned that the Islamic Republic would strike U.S. bases across the region if a conflict breaks out.
Oil prices could spike to $120 per barrel or more if Iran closes the Strait of Hormuz in response to an Israeli strike, said Natasha Kaneva, head of global commodities research at JPMorgan.
Some 30% of the world’s seaborne oil trade moves through the strait, according to JPMorgan. But the risk of an Iranian blockade is low, Kaneva told clients in a Thursday note.
“Crucially, for all of recorded history, despite many threats, the Strait of Hormuz has never been closed off. Crude oil continued to flow,” she said.
