Oil Climbs on Renewed US-Iran Tensions

WTI crude futures climbed above $91 per barrel on Thursday, rebounding from losses in the previous session as renewed hostilities between the US and Iran weakened expectations for a near-term peace agreement that could end the conflict and reopen the Strait of Hormuz. US forces reportedly struck an Iranian military site believed to pose a threat to American troops and commercial shipping routes through Hormuz, while also intercepting Iranian drones. Meanwhile, Iran’s Revolutionary Guard said it had targeted a US airbase, though it did not disclose the location. Washington and Tehran also remained at odds over major sticking points in negotiations, including Iran’s insistence on maintaining control of the strait and preserving its nuclear program. Despite the latest escalation, oil prices are still on track for a second consecutive weekly decline amid expectations that both sides could eventually reach a peace agreement and reopen the Strait of Hormuz.

WTI crude futures climbed above $92 per barrel on Thursday, recovering losses from the previous session as negotiations between the US and Iran remained deadlocked over several key issues tied to ending the conflict. Reports of fresh US strikes on Iran also stoked fears of further disruptions to commercial shipping through the Strait of Hormuz. Among the main obstacles are Tehran’s demands to maintain control of the strait and preserve its nuclear program. President Donald Trump also reiterated that Washington would not accept what he described as a bad deal, while rejecting any sanctions relief despite Iran’s calls for an end to attacks and economic concessions. Even so, oil prices remain on track for a second straight weekly decline amid expectations that both sides could eventually secure a peace agreement and reopen the Strait of Hormuz.

WTI crude oil futures dropped more than 4% to below $90 per barrel on Wednesday, hovering near a five-week low as optimism grew that the US and Iran could reach a peace agreement, despite conflicting signals from both sides. Iranian state television reported an unofficial draft of an interim deal to end the war, while the White House dismissed the report as “a complete fabrication”. A potential reopening of the Strait of Hormuz, which normally carries about 20% of global oil and LNG supplies, could significantly ease pressure on global energy markets. However, major issues remain unresolved, including Iran’s frozen assets and guarantees over shipping access through the strait. Iranian officials said indirect talks with Washington are continuing, while US Secretary of State Marco Rubio warned that any agreement may still take several days. The Strait remains largely closed, although two non-Iranian supertankers crossed Hormuz on Tuesday for the first time in a week.