Oil Prices Flat, OPEC+ Holds Output as US-Iran Strikes Keep Strait of Hormuz in Limbo

Global crude prices closed nearly flat on Tuesday as traders braced for a prolonged standoff between Washington and Tehran following a return of military strikes [234383]. The resumption of hostilities no longer shocks buyers or sellers, with one energy analyst noting, “The market has priced in a longer fight” [234383]. Brent crude settled slightly lower, while U.S. West Texas Intermediate edged up, underscoring a market caught between geopolitical risk and ample global supplies [234383].

Oil prices held onto Tuesday’s gains on Wednesday after the U.S. and Iran exchanged overnight strikes, reducing the chances of a quick deal to reopen the Strait of Hormuz [233147]. The waterway, a critical passage for global crude shipments, handles about one-fifth of global oil consumption, making any threat there a trigger for price spikes [236724]. No immediate talks were announced, and traders are now pricing in a longer period of disruption [233147].

The ongoing instability is limiting OPEC+’s ability to influence prices and its own market share [236612]. The group, which includes major producers such as Saudi Arabia and Russia, is likely to leave its oil production policy unchanged when it meets on Sunday, according to sources familiar with the matter [234334]. The decision comes as global oil markets remain balanced, with supply and demand staying relatively stable [234334]. The group will not announce new cuts or increases, instead maintaining current production levels agreed upon in previous meetings [234334].

For now, OPEC+ is holding steady, but its leverage appears weakened by forces beyond its control [236612]. The group’s decision reflects a reality where geopolitical risks, not production levels, are driving the market [236612]. Traders are watching for any sign of escalation that could threaten shipping lanes or production sites, but without that, oil appears stuck, waiting for a clearer signal from either side [234383].

Iran has warned of faster and heavier retaliation against U.S. attacks, while admitting that the ongoing conflict is taking a growing toll on its economy [236599]. U.S. Energy Secretary Chris Wright said a new nuclear agreement with Tehran may never be reached, casting doubt on diplomatic efforts to curb Iran’s nuclear program [236599]. In response, Iranian officials signaled they would not back down, vowing a stronger military response to any future U.S. action [236599].

Oil steady? Strait of Hormuz chaos caps OPEC+ power. Oil Steady After U.S.-Iran Strikes Cloud Hormuz Reopening Hopes U.S.-Iran Conflict Drags On, Oil Prices Go Nowhere OPEC+ Set to Keep Oil Output Steady, Sources Say Asian Stocks Set to Surge as Iran Crisis Drives Oil Prices Up