Oil prices slipped after hitting their highest in more than a month on Wednesday as profit-taking kicked in, while the focus shifted to the upcoming Energy Information Administration's crude oil inventory data.
Front-month West Texas Intermediate crude fell by 0.6% to $89.68 per barrel, while Brent futures slipped 0.4% to $94.28/bbl.
Both benchmarks hit their highest since July 24 earlier in the day amid supply disruption fears due to the escalation between US and Iran.
The volatility follows a wave of strikes by American forces against Islamic Revolutionary Guard Corps targets in response to attempted attacks on commercial shipping and mine deployments in the Strait of Hormuz.
Geopolitical friction has severely constrained physical maritime logistics, with commercial vessel traffic through the Strait of Hormuz halving to just five crossings on August 31.
Although Persian Gulf producers were making dark crossings through the bottleneck, analysts note these alternative routes are insufficient to offset regional flow restrictions, steadily tightening global crude and refined product balances.
However, ING analysts said "We've seen oil flow through the Strait of Hormuz despite the stalemate between the US and Iran, but rising tensions clearly put crossings at risk."
On the supply side, American Petroleum Institute data revealed that US crude inventories fell by 2.6 million barrels for the week ended August 28, following a 4.2 million-barrel build the prior week.
The oil market now awaits crude inventory data from the EIA to assess the supply and demand picture.