Oil prices were edging lower early Thursday as the U.S. and Iran continued to exchange strikes. Markets were reacting to President Donald Trump's claim that American forces were in control of the Strait of Hormuz.
Brent crude futures, the international standard, were down 0.8% at $92.40 a barrel. West Texas Intermediate futures were falling 0.6% at $89.45 a barrel.
The U.S. launched strikes on Iranian military surveillance capabilities, communication systems, and air defense sites across Iran on Wednesday, according to U.S. Central Command. Iran said it targeted the U.S. Fifth Fleet in Bahrain in a drone attack.
Additionally, Trump said late Wednesday that the U.S. had been clandestinely guiding some ships through the crucial Strait of Hormuz. The president said more than 200 commercial ships had safely traveled the crucial waterway, resulting in more than 100 million barrels of oil reaching the market.
"This wildly successful effort is because the UNITED STATES of AMERICA CONTROLS the Strait of Hormuz -- NOT Iran. Their military is defeated, and their economy is lost. It's over for Iran!," Trump posted on Truth Social.
However, oil markets appear to be worried an extended U.S.-Iran conflict may disrupt shipping for the foreseeable future. The International Energy Agency estimates the world has lost about 13 million barrels a day of oil supply during the fighting, meaning more than one billion barrels in total.
"Investors are increasingly pessimistic that a deal will be reached anytime soon, or that the Strait of Hormuz will reopen," wrote Deutsche Bank analyst Henry Allen in a research note Thursday.