Oil prices fell on Thursday as investors shied away from taking new positions after U.S. President Donald Trump sent mixed signals about possible U.S. involvement in the Iran-Israel conflict, while the Federal Reserve kept interest rates unchanged, UNN reported, citing Reuters.
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Brent crude futures fell 20 cents, or 0.26%, to $76.5 a barrel by 04:21 GMT (07:21 Kyiv time) after rising 0.3% in the previous session when high volatility led to a 2.7% drop in prices.
July West Texas Intermediate crude fell 4 cents, or 0.05%, to $75.10 a barrel, after rising 0.4% in the previous session when it fell 2.4%.
"A healthy risk premium is still priced in, as traders await whether the next stage of the Israeli-Iranian conflict will be a U.S. strike or peace talks," said Tony Sycamore, a market analyst at IG, in a client note.
Goldman Sachs said on Wednesday that a geopolitical risk premium of about $10 a barrel is justified, given the decline in Iranian supply and the risk of larger disruptions that could push Brent crude prices above $90.
Trump told reporters that he might decide whether the U.S. joins Israel in its attacks on Iran, or not. The conflict continued for the seventh day on Thursday.
Direct U.S. intervention would expand the conflict, increasing the risk of attacks on energy infrastructure in the region, analysts say.
Due to the unpredictability that has long characterized Trump's foreign policy, "markets remain nervous, awaiting clearer signals that could impact global oil supply and regional stability," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Iran is the third-largest producer among the Organization of the Petroleum Exporting Countries, producing about 3.3 million barrels of crude oil per day.
About 19 million barrels of oil and oil products per day are moved through the Strait of Hormuz along Iran's southern coast, and there are widespread fears that hostilities could disrupt trade flows.
Separately, the U.S. Federal Reserve kept its interest rates unchanged on Wednesday but signaled two rate cuts by the end of the year. Fed Chair Jerome Powell said the cuts would be "data-dependent" and that he expected consumer inflation to accelerate due to tariffs planned by Trump.
Lowering interest rates would stimulate the economy and, consequently, demand for oil, but it could increase inflation.
Iran Maximizes Oil Exports Despite Conflict - Bloomberg18.06.25, 18:47