Oil Dips But Could Hit $130 If Trump Negotiations With Iran Fail

by Ship & Bunker News Team
Thursday June 12, 2025

Oil breaking free of its range bound status proved to be fleeting on Thursday, as traders caused prices to dip based on fears that escalating tensions between the U.S. and the Middle East could lead to supply disruptions.

Brent settled down 41 cents, at $69.36 per barrel, while West Texas Intermediate settled down 11 cents at $67.97 per barrel.

Much of the analytical consternation focused on U.S. president Donald Trump, who, in voicing his suspicion that Washington won't reach a nuclear deal with Iran, said a strike by Israel against the Islamic republic "could very well happen" – even though he didn't think it was imminent.

But a senior Israeli official told media a strike could occur as soon as Sunday unless Iran agrees to halt production of material for an atomic bomb.

Natasha Kaneva, head of global commodities research at JPMorgan, said oil prices could reach $130 per barrel or more if Iran closes the Strait of Hormuz in response to an Israeli strike; however, she added that, "Crucially, for all of recorded history, despite many threats, the Strait of Hormuz has never been closed off."

In other oil news on Thursday, four sources familiar with the matter told media that most countries in the Group of Seven nations are ready to lower the G7 price cap on Russian oil even if Trump elects to opt out.

The European Union and the UK have been pushing to lower the cap for weeks due to a global oil prices falling to the point where the current $60 cap was practically irrelevant.

Also on Thursday, Mark Maki, chief executive of Trans Mountain, told delegates at a conference in Calgary that the expanded Trans Mountain pipeline in Canada could raise its capacity by another 75,000 barrels per day (bpd) by early 2027, by using chemicals to help crude flow more easily.

China has now become the biggest buyer of Canadian crude shipped via the pipeline to Canada's West Coast.