Gas prices are shown at a Brooklyn gas station in New York City on Tuesday. Spencer Platt/Getty Images
Oil prices are declining today after temporarily rising above $126 a barrel, marking a four-year peak, as traders express concerns about an extended shutdown of the Strait of Hormuz that could tighten global oil availability even further.
Brent crude, the international oil standard, reached an intraday peak of $126.41 before dropping to $116.6 a barrel as trading activity decreased. WTI, the American benchmark, remained mostly unchanged at $106.7 per barrel.
“The oil market has transitioned from… wishing for a solution to focusing intensely on the tangible scarcity and enduring risk to supply with the potential intensification of conflict now imminent,” Neil Wilson, a strategist at investment bank Saxo noted in a memorandum.
US President Donald Trump aims to prolong a blockade of Iranian ports, sources informed Xenix News, a decision that might prompt Tehran to respond, potentially by targeting energy infrastructure.
The price surge on Thursday was also influenced by peculiarities in oil futures contracts, as stated by Wilson. The frequently referenced June futures contract expires today, leading trading volume to transition to the July contract, currently priced at approximately $110 a barrel.
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