Oil Prices Steady as Doubts Persist Over US-Iran Peace Prospects

Oil markets showed limited movement on Thursday as investors weighed uncertainty surrounding potential peace talks between the United States and Iran, with ongoing conflict continuing to disrupt supplies from the Middle East.

Brent crude futures slipped by 26 cents to $94.67 a barrel in morning trading, while US West Texas Intermediate (WTI) crude edged up 14 cents to $91.43. Both benchmarks had ended the previous session largely unchanged after fluctuating throughout the day.

The market remains under pressure due to the prolonged conflict involving the US, Israel and Iran, which has significantly affected energy flows through the Strait of Hormuz. The strategic waterway typically handles about one-fifth of global oil and liquefied natural gas shipments, making any disruption a major concern for international markets.

Analysts say investor confidence in a diplomatic breakthrough remains fragile. Toshitaka Tazawa of Fujitomi Securities noted that while there are signs of possible de-escalation, previous rounds of negotiations have repeatedly failed to produce lasting agreements.

He said oil prices are likely to remain volatile, with WTI expected to trade between $80 and $100 per barrel until a clear resolution is reached and normal shipping through the strait resumes.

Estimates from ING suggest that around 13 million barrels per day of oil supply has been affected by the disruption, even after accounting for alternative pipeline routes and limited tanker traffic that has continued to pass through the region.

The situation may tighten further following Washington’s decision to impose a blockade on Iranian ports after talks collapsed over the weekend. Analysts warn that each passing day without restored flows is adding strain to the physical oil market.

There are, however, tentative signs of diplomatic movement. A source familiar with discussions in Tehran indicated that Iran may consider allowing ships to pass through parts of the Strait of Hormuz if a broader agreement is reached to prevent renewed fighting. A two-week ceasefire that began on April 8 has provided a temporary pause in hostilities.

Efforts to revive negotiations are ongoing, with US and Iranian officials considering further talks in Pakistan. Pakistan’s army chief arrived in Tehran on Wednesday as part of mediation efforts aimed at preventing an escalation.

Meanwhile, US Treasury Secretary Scott Bessent confirmed that Washington will not extend waivers that previously allowed limited purchases of Iranian and Russian oil without sanctions, tightening supply further.

Adding to market pressure, data from the US Energy Information Administration showed declines in crude, gasoline and distillate inventories last week, as exports rose and imports fell in response to global demand shifts.