Brent crude falls below $110 after spike above $120 amid volatility

Brent crude fell below $110 per barrel on Thursday, retreating sharply after topping $120 a day earlier, as volatility continued to grip global oil markets.

The international benchmark declined more than 1.4% to around $108.9 as of 1118GMT, following recent gains driven by concerns over supply risks linked to the Iran war and uncertainty around energy flows through the Strait of Hormuz.

Prices remain highly sensitive to developments around the strategic waterway, one of the world’s most critical energy chokepoints, as the US maintains blockade pressure on Iranian ports and the strait.

Markets are closely watching whether oil and gas flows from the Gulf can normalize, with any disruption raising concerns about tighter global supply, higher shipping costs and renewed inflationary pressure.

Despite the pullback, risk premiums remained elevated as traders monitored the scale and duration of the conflict, the impact of the blockade on tanker traffic and any signals from Washington and Tehran on potential diplomatic progress.

The decline also reflected profit-taking after the previous day’s surge, while uncertainty over demand, inventories and possible emergency supply responses continued to drive sharp price swings.