Crude oil prices fell toward $89 per barrel on Thursday, as fears of renewed conflict between the US and Iran were offset by signs of increased shipments through the Strait of Hormuz and weakening demand from China. The US military conducted strikes on multiple targets in Iran for a second consecutive day after President Donald Trump accused Tehran of stalling talks on an interim peace agreement. So far, however, the attacks have not affected energy infrastructure.
At the same time, traders reported that Chinese buyers are poised to take substantially lower volumes of Saudi crude in July, with imports already at their lowest level in eight years. Despite this softer demand backdrop, global inventories continue to show evidence of tightening. In the US, crude stockpiles, including the Strategic Petroleum Reserve, declined by 15 million barrels last week and have fallen by more than 70 million barrels over the past five weeks, marking the steepest drawdown since the 1980s. Fuel inventories in Singapore are also at their lowest since 2013.
