Oil prices were broadly steady on Thursday after suffering heavy losses earlier in the week, with investors balancing improving prospects for shipping through the Strait of Hormuz against higher U.S. crude stockpiles and ongoing geopolitical uncertainty.
At 02:55 ET (06:55 GMT), October Brent crude futures rose 0.3% to $79.71 per barrel, while West Texas Intermediate (WTI) crude added 0.2% to $75.38 per barrel.
Although prices were little changed during Wednesday’s session, both benchmarks remain on track to post weekly losses exceeding 10%.
Shipping agreement boosts confidence, but risks remain
Market sentiment improved after Iran confirmed it had agreed with Oman on the coordinates of a proposed shipping corridor through the Strait of Hormuz, one of the world’s most important routes for oil and liquefied natural gas exports.
Even so, traders remain cautious because negotiations covering transit charges, cargo inspections and broader security arrangements have yet to be completed, meaning the waterway has not fully reopened.
Speaking in Las Vegas on Wednesday, U.S. President Donald Trump said Washington continues to hold discussions with Tehran and that he would “see what happens” as negotiations develop.
Iran has denied that formal peace negotiations with the United States are taking place.
ING analysts said, “The real hinge point now becomes the trajectory of US–Iran discussions, because meaningful progress there is essential before disrupted energy flows can realistically resume.”
The prospect of additional tanker traffic has eased concerns over severe supply disruptions, although analysts believe geopolitical tensions continue to justify a significant risk premium in crude prices.
Unexpected US inventory build limits recovery
Oil’s rebound was restrained after official U.S. data showed crude inventories increased by around 2.5 million barrels last week, surprising markets that had expected a drawdown of roughly 1.5 million barrels.
Meanwhile, refined fuel inventories moved lower, with gasoline stocks declining by 1.64 million barrels and distillate inventories falling by 3.47 million barrels.
Beyond the Strait of Hormuz, energy markets continue to monitor other geopolitical flashpoints, including Houthi attacks on commercial shipping in the Red Sea, ongoing disruption to maritime trade linked to the Russia-Ukraine conflict and interruptions affecting Kazakhstan’s principal oil export route.
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