Oil prices moved higher on Thursday as investors reacted to mixed signals about potential de-escalation in the Middle East, while Iran examined a U.S. plan aimed at bringing the conflict to an end.
At 05:33 ET (09:33 GMT), Brent crude futures for May delivery, the international benchmark, had climbed 4.0% to $106.34 per barrel. U.S. West Texas Intermediate crude futures also rose 3.7% to $93.66 per barrel.
Market participants were evaluating tentative diplomatic developments from Tehran, where officials are reportedly reviewing a U.S.-supported framework intended to stop the fighting.
However, Iranian authorities have publicly rejected claims that they are engaged in direct negotiations with Washington and indicated that major differences between the two sides remain unresolved. The uncertainty has kept traders cautious.
Oil markets have experienced sharp volatility in recent weeks as the conflict disrupted energy flows from the Persian Gulf, a region that plays a crucial role in global crude supply. Earlier this month, Brent prices briefly surged to nearly $120 per barrel amid fears of potential supply disruptions.
The Strait of Hormuz — a key shipping corridor through which roughly one-fifth of the world’s oil supply passes — has effectively been closed to tanker traffic due to the threat of Iranian attacks on vessels.
On Wednesday, crude prices had eased after reports emerged suggesting that the United States and Iran could hold negotiations aimed at ending the conflict, which has now lasted close to a month.
Investors are also monitoring conflicting signals from Washington. Officials have warned that stronger actions could be taken if Iran fails to cooperate, while U.S. President Donald Trump has reportedly told aides he would like the war to end swiftly.
Despite recent swings, oil prices remain well above levels seen before the outbreak of fighting in late February. The rise has heightened concerns that global inflation pressures could intensify, potentially forcing central banks to reconsider raising interest rates.
“A more prolonged disruption to energy supplies would deliver a much larger hit to global activity similar” to that seen after Russia’s invasion of Ukraine in 2022 and “prompt a broader monetary tightening cycle,” analysts at Capital Economics wrote in a note to clients.
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