Oil Prices Jump as Markets Doubt U.S.–Iran Talks Will Quickly Fix Hormuz Disruptions
Oil prices rose sharply on Thursday as investors questioned whether upcoming U.S.–Iran peace talks can quickly resolve the Middle East supply disruptions caused by the ongoing war.
Brent crude futures jumped $4.46, or 4.7%, to settle at $99.39 a barrel. U.S. West Texas Intermediate (WTI) gained $3.40, or 3.7%, to settle at $94.69 a barrel.
The U.S.-Israeli war with Iran has been described as the largest-ever disruption to global oil and gas supplies, driven by Iran’s interruption of traffic through the Strait of Hormuz—a key chokepoint that typically carries about 20% of global oil and liquefied natural gas flows. With maritime traffic still effectively shut, oil users have been drawing down inventories, tightening physical markets.
“We remain sceptical of any immediate solving of this war,” said PVM oil market analyst John Evans, adding that for every encouraging headline there is “always a counter.”
Two Iranian sources told Reuters that U.S. and Iranian negotiators have scaled back expectations for a comprehensive peace agreement and are instead pursuing a temporary memorandum to prevent a return to conflict. U.S. President Donald Trump later said the U.S. is “very close” to a deal with Iran, though oil benchmarks barely reacted. Markets also showed little response to Trump’s announcement of a 10-day ceasefire between Israel and Lebanon.
Supply strain is increasingly showing up in inventories, particularly for jet fuel in parts of Asia and Africa. ING estimates that roughly 13 million barrels per day of oil flows have been disrupted by the Strait’s closure.
In the U.S., government data showed crude inventories fell by 913,000 barrels last week, versus expectations for a 154,000-barrel build. Gasoline and distillate stocks also declined as U.S. exports rose to meet demand from countries seeking replacements for Middle Eastern barrels. TP ICAP analyst Scott Shelton said the lack of improvement in transit through Hormuz—despite the U.S. blockade—has kept the global stock draw in place, a tightening trend that is now visible in U.S. inventory data.
Source : Newsmaker.id
