(Refiles to fix typo in headline to "fall" from "fell")By Anushree MukherjeeJuly 9 : Oil prices fell on Thursday as markets assessed the impact of fresh U.S. strikes on Iran, which could hinder progress on talks to end their war and allow for the full reopening of the key Strait of Hormuz.Brent crude futures fell $1.03, or 1.32 per cent, to $76.99 a barrel by 0749 GMT. U.S. West Texas Intermediate crude futures lost 88 cents, or 1.2 per cent, at $72.64 a barrel.
Brent and WTI crude futures hit their highest levels since June 22 on Wednesday.Both crude benchmarks, WTI and Brent, rose more than a dollar in post-settlement trade on Wednesday after the U.S. military began launching fresh strikes on Iran, triggering Iranian attacks on Kuwait and Bahrain in the latest escalation to derail efforts to end the war.The latest strikes, which the U.S. said were in response to Tuesday's attack on three cargo ships in the Strait of Hormuz, came hours after President Donald Trump said an interim ceasefire with Iran was "over.""Traders are now reassessing the situation, especially as things are very much up in the air regarding oil flows through the Strait of Hormuz," said Tim Waterer, chief market analyst at KCM Trade."The possibility that the next move could be de-escalatory is what’s currently preventing oil from pushing meaningfully higher."U.S. President Donald Trump said Iran had called "a while ago" and wanted to make a deal. Some war underwriters have advised shipping companies to pause voyages through the Strait of Hormuz while others are reviewing their policy terms after renewed vessel attacks threatened a return to war, insurance industry sources said on Wednesday.Before the latest flare-up in the U.S.-Israeli war on Iran, prices had been falling as the market tried to absorb the pent-up Middle Eastern supply released by the truce and some signs of rising inventories. A fifth of global oil and liquefied natural gas supplies traversed the Strait of Hormuz prior to the Iran war, and Tehran's control of the waterway has been its main leverage in a conflict that started with U.S. and Israeli airstrikes against Iran on February 28.Goldman Sachs said risks to Gulf oil flows and near-term prices remain two-sided. It expects flows to normalize by end-July if negotiations continue, sanctions waivers on Iranian oil are reinstated and shippers receive security assurances. That scenario would require Hormuz flows to increase by 6.6 million barrels per day.However, the bank warned that failed talks, escalating tanker attacks and a potential U.S. blockade of Iranian oil could further disrupt flows."In the base case Brent probably trades in a $75–85 range over the next month, with a mild upward bias," said Aneeka Gupta, director of macroeconomic research at WisdomTree."The underlying supply recovery is real but incomplete, the surplus narrative is discredited for now, and diplomatic engagement (while stalled) hasn't collapsed entirely."Elsewhere, Russia banned diesel exports on Wednesday to support its domestic fuel market after Ukrainian drone attacks on refineries caused fuel shortages and price spikes.
