Oil prices ease after spiking following fresh U.S. strikes against Iran

Oil prices turned lower on Thursday having spiked after the U.S. carried out fresh strikes on Iran, renewing concerns about supply disruptions in the Middle East.

International benchmark Brent crude futures with September delivery traded 0.3% lower at $77.73 per barrel during early European hours, erasing earlier gains. The contract settled up 5.4% in the previous session, notching its biggest daily gain since May 4.

U.S. West Texas Intermediate futures with August delivery, meanwhile, traded down 0.2% at $73.40. WTI advanced 4.4% on Wednesday, registering its biggest daily gain since June 1.

Brent crude

The U.S. Central Command said Wednesday that fresh strikes on Iran were launched in response to Tehran's attacks on commercial shipping in and around the Strait of Hormuz.

U.S. President Donald Trump also signaled earlier in the day that he was no longer interested in negotiating a deal with Iran. Prior to that, he also said that the ceasefire between Iran and the U.S. was "over," following another wave of attacks in the Middle East.

"The market is again being forced to price the risk that renewed attacks on shipping, or a broader breakdown in US-Iran relations, could slow the normalisation of flows through the Strait of Hormuz," according to Saxo.

As the Strait of Hormuz is one of the most important energy chokepoints in the world, "even limited disruption can have an outsized impact on prompt pricing, freight costs and market sentiment," it added.