Oil prices pushed higher again on Thursday, rising by more than $1 as stalled negotiations between the United States and Iran and continued curbs on shipping through the Strait of Hormuz kept supply concerns front and center.
Brent crude futures (LCOc1) climbed $1.26, or 1.2%, to $103.17 a barrel at 06:30 GMT, after settling above the $100 mark for the first time in over two weeks in the previous session. U.S. West Texas Intermediate futures (CLc1) also advanced, gaining $1.20, or 1.3%, to $94.16.
Both benchmarks had already surged by more than $3 on Wednesday, supported by larger-than-expected declines in U.S. gasoline and distillate inventories, as well as the absence of progress in diplomatic efforts with Iran.
“The oil market is repricing expectations with little sign of progress in finding a resolution in the Persian Gulf,” analysts at ING said, noting that hopes for a breakthrough are fading.
“In addition, Iran’s seizure of two vessels attempting to transit the Strait of Hormuz suggests disruptions to shipments are set to continue.”
Hormuz chokepoint tensions remain elevated
Despite U.S. President Donald Trump agreeing to extend a ceasefire following mediation by Pakistan, both Tehran and Washington continue to impose restrictions on maritime traffic through the Strait of Hormuz—a route that previously handled around 20% of global oil supply before the conflict erupted on February 28.
Iran seized two ships in the waterway on Wednesday, tightening its hold over the strategic passage. Meanwhile, the United States has maintained its naval blockade targeting Iranian trade. Iranian parliament speaker and chief negotiator Mohammad Baqer Qalibaf said a comprehensive ceasefire would only be viable if the blockade is lifted.
At the same time, U.S. forces have intercepted at least three Iranian-flagged tankers in Asian waters, diverting them away from routes near India, Malaysia, and Sri Lanka, according to shipping and security sources.
With the ceasefire extension announced earlier in the week, Trump once again pulled back from earlier threats to strike Iranian infrastructure such as power plants and bridges. The White House has not set a timeline for when the truce might end, press secretary Karoline Leavitt said.
U.S. exports reach fresh highs
On the supply side, U.S. exports of crude oil and refined products rose by 137,000 barrels per day to a new record of 12.88 million bpd, as buyers in Europe and Asia stepped up purchases amid disruptions tied to the Iran conflict.
Data from the Energy Information Administration showed that U.S. crude inventories increased, while fuel stockpiles declined.
Crude stocks rose by 1.9 million barrels, contrasting with expectations in a Reuters poll for a draw of 1.2 million barrels.
Gasoline inventories fell by 4.6 million barrels, exceeding forecasts for a 1.5 million-barrel decline, while distillate stocks dropped by 3.4 million barrels compared with expectations of a 2.5 million-barrel fall.
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