After a dramatic rally in the previous session, oil prices retreated on Thursday as crude continued to move out of the Middle East even as the US-Iran war widened beyond its primary battlefronts.WTI crude slipped 0.54% to $84.00 a barrel, while Brent crude fell 0.85% to $89.97 a barrel.The decline followed a sharp rebound on Wednesday, when Brent jumped 7.91% and WTI gained 6.56%. The gains had erased the losses from Tuesday, when both benchmarks had dropped about 5% after hostilities briefly paused in the five-month conflict.Even as tensions intensified, shipping activity suggested that oil supplies were still finding routes out of the region. Preliminary data showed 39 commodity vessels entered the Red Sea through the Bab el-Mandeb Strait on Tuesday, the highest number recorded since July 19. Traffic through the Strait of Hormuz, however, remained limited.“While overall volumes are reduced, oil continues to leak out of the region through multiple channels, and additional workarounds are being explored. The longer this situation persists, the more these alternative routes and methods will erode Iran’s leverage over the Strait of Hormuz,” IG market analyst Tony Sycamore said in a note cited by Reuters.The Strait of Hormuz, which previously handled around one-fifth of global oil and gas flows, has remained largely blocked since the US-Iran war began in February, despite diplomatic efforts aimed at reopening the waterway.A senior Iranian official said Tehran had rejected an Omani proposal for regional joint management of the strategic passage.Military action in the region also intensified. US-Saudi strikes targeted Iran-backed paramilitary forces in Iraq on Wednesday, marking the first publicly acknowledged participation by Saudi Arabia in US air strikes. The operation was carried out in response to drone attacks on Saudi oil facilities launched from Iraq.The strikes marked the return of US military action in the Middle East after President Donald Trump halted a bombing campaign over the weekend because of dwindling munitions.Iran said it had responded by firing on US bases in Jordan and attacking three tankers travelling through the Strait of Hormuz, claiming the vessels had used an unauthorised route.Separately, sources said Saudi Arabia was working to assemble a coalition to protect shipping in the Red Sea from Houthi attacks.The Iran-backed Houthi movement in Yemen had announced on July 20 that it would impose a naval blockade on Saudi Arabia in the Red Sea. The group said it would widen attacks on tankers and also target shipping through the Bab el-Mandeb Strait, opening another front in the ongoing Iran war.Meanwhile, though crude prices have once again jumped to the $90 per barrel mark, the spike is still less than the $126 per barrel reached earlier during the conflict.