Written by The Banking Post
Oil prices held near recent levels on Thursday, reversing earlier losses as doubts grew over whether US-Iran talks can ease supply disruptions in the Middle East.
Brent crude edged up to $95.02 a barrel, while US West Texas Intermediate (WTI) rose to $91.73. Both benchmarks remained volatile, reflecting uncertainty over the conflict’s impact on global supply.
At the centre of the market tension is the Strait of Hormuz, a critical route that carries roughly one-fifth of the world’s oil and liquefied natural gas. Ongoing conflict and restrictions in the region have significantly disrupted flows, tightening global supply.
Investors remain cautious despite diplomatic efforts. “While there are hopes for de-escalation, many investors remain sceptical, given that US-Iran talks have repeatedly broken down even after appearing to make progress,” said an analyst.
Market estimates suggest that around 13 million barrels per day of oil supply has been affected, even after accounting for alternative routes and limited tanker movement. Analysts warn the market is tightening further with each day of disrupted flows.
“Until a peace deal is reached and free navigation through the strait is restored, prices are likely to remain volatile,” another analyst said, projecting WTI to fluctuate between $80 and $100 per barrel.
Geopolitical risks intensified after the US tightened restrictions on Iranian oil exports following stalled negotiations. However, there are tentative signs of diplomacy, with discussions underway on a potential ceasefire arrangement that could allow partial resumption of shipping.
Sources indicate Iran may consider permitting limited passage through parts of the strait if a broader agreement prevents renewed conflict. Talks could resume soon, with regional mediation efforts also gaining momentum.
For now, the oil market remains on edge, with prices supported by supply concerns and the absence of a clear diplomatic breakthrough.
