Oil Prices Remain Stable as Investors Assess Impact of Trump's Escalating Iran Tensions

Global Oil Prices Remain Steady Amid Ongoing Tensions with Iran

Oil prices held steady on Thursday as traders cautiously weighed President Donald Trump's latest threat to resume strikes on Iran, a pledge he has made repeatedly before backing off since a truce started in early April. West Texas Intermediate was near $104 a barrel, after slipping 0.2% on Tuesday, while Brent closed above $111.

President Trump's comments once again raised the prospect of a return to active hostilities with Iran, which has so far refused to bow to US demands to relinquish the remaining elements of its nuclear program after weeks of strikes that began in late February. However, the president has repeatedly threatened and then backed off from renewed military action since a ceasefire was agreed on April 8, leaving traders reluctant to add to long positions without firmer evidence that fighting will resume.

The war, now in its 12th week, has choked traffic through the Strait of Hormuz, driving global energy prices and inflation higher. The US also seized an Iran-linked tanker in the Indian Ocean overnight - at least the third such seizure targeting Tehran's shadow fleet, according to the Wall Street Journal.

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An industry report indicated that US crude stockpiles dropped by 9.1 million barrels last week, which would be the biggest decline since September if confirmed by official data due later Wednesday. Meanwhile, White House officials are holding firm against restricting oil exports even as domestic inventories dwindle.

A massive Brent crude put options bet equivalent to 134 million barrels traded in a single block on Tuesday, rattling a market already on high alert for unusual flows. Investors have increasingly priced in a prolonged closure, according to a Goldman Sachs poll earlier this month - meaning a NATO-led effort could return supply to market faster than expected. News that NATO is discussing escorting ships through the strait should the route remain closed past early July also weighed on futures.