Crude oil prices fell amid thin summer trading, as signs of increased shipping traffic through the Strait of Hormuz offset concerns over a renewed wave of conflict spanning from Iran to the Black Sea region.

WTI crude dropped 1%, settling below $84 per barrel, while Brent crude closed near $89 per barrel. The Brent futures contract is set to expire on Friday, with open interest declining steadily ahead of expiration, distorting price action. Traders are reluctant to place large bets as they weigh the US and Iran's mutual airstrikes on Thursday against a recent rebound in shipping traffic through the Strait of Hormuz, the critical waterway connecting the Persian Gulf to global markets.

According to market intelligence firm Kpler, 14 commercial cargo vessels transited the strait in both directions on Wednesday, up from single-digit figures last week. Energy markets have experienced renewed volatility this month. With a brief ceasefire between Tehran and Washington collapsing and hostilities resuming, investors have had to navigate rapidly shifting dynamics.

The US Central Command posted on X that American forces struck dozens of Iranian military targets early Thursday, actions aimed at degrading Tehran's ability to threaten US troops, American Arab allies, and commercial shipping in the region. Markets are also focused on two attacks against vessels preparing to load cargo at the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, a key export route for Kazakh crude. Similar attacks last week disrupted loading operations for several days, helping to push oil prices above $100 per barrel.

"Commodity trading advisors were sellers of WTI crude on the day, but the supply picture continues to tighten," TD Cowen analysts wrote in a note. Attacks on the Caspian Pipeline Consortium terminal "will continue to reduce Russian crude exports by 1 million to 2 million barrels per day compared to June averages; as drone strikes persist, the supply disruption could also extend for a longer period," they stated.

WTI crude for September delivery fell 1% to settle at $83.59 per barrel. Brent crude for September delivery declined 1.9% to close at $89.03 per barrel.