Oil prices retreated slightly on Thursday, July 16, 2026, as traders reassessed the impact of renewed military confrontation between the United States and Iran, with markets closely monitoring the threat to global crude supplies through the Strait of Hormuz.
Brent crude fell 24 cents, or 0.28 per cent, to $84.95 per barrel, while U.S. West Texas Intermediate (WTI) crude declined 15 cents, or 0.19 per cent, to $79.45 per barrel.
The pullback came after both benchmarks surged earlier in the week to their highest levels in nearly a month.
The market initially rallied following fresh U.S. strikes on Iranian coastal defence and missile installations on Wednesday, a day after Washington reinstated a naval blockade on Iranian ports.
Iran responded by warning it could further restrict regional energy exports, describing the conflict as an “existential war” with the United States.
Analysts said traders are now balancing geopolitical uncertainty against the absence of major disruptions to global oil flows.
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Phillip Nova senior market analyst Priyanka Sachdeva told Reuters that while geopolitical tensions continue to underpin oil prices, investors have become more cautious after recent gains, waiting to see whether the conflict leads to sustained supply disruptions.
Concerns remain focused on the Strait of Hormuz, a strategic waterway through which around 20 per cent of the world’s oil and liquefied natural gas shipments moved before the conflict escalated.
Shipping activity through the strait slowed sharply on Wednesday, with only seven vessels making the crossing compared to 13 the previous day, adding to concerns over the security of global energy supplies.
The renewed confrontation between Washington and Tehran has also cast doubt on the durability of the ceasefire reached in June, raising fears that prolonged instability in the Gulf could keep energy markets on edge in the coming weeks.
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