Oil prices steady on Thursday

Oil prices held broadly steady on Thursday, reversing earlier losses as investor scepticism over potential US–Iran peace talks offset market pressure from supply disruptions.

Brent crude edged down by 26 cents to $94.67 a barrel at 0611 GMT, while US West Texas Intermediate crude rose 14 cents to $91.43 a barrel. Both benchmarks had settled largely unchanged in the previous session despite trading within a wide range.

Market sentiment remained cautious as doubts persisted over the likelihood of a breakthrough in negotiations between the United States and Iran to end the conflict, which has significantly disrupted oil flows from the Middle East. The war has led to one of the largest disruptions to global oil and gas supplies, with Iran restricting traffic through the Strait of Hormuz, a key route for around 20 per cent of global oil and liquefied natural gas shipments.

Analysts indicated that disrupted flows through the strait have tightened global supply, with estimates suggesting around 13 million barrels per day have been affected despite limited alternative routes and reduced tanker movement. The situation could worsen following a US blockade on Iranian ports after talks collapsed over the weekend.

Expectations of continued volatility remain, with prices likely to fluctuate between $80 and $100 per barrel until a resolution restores full navigation through the strait. The physical oil market is tightening further as delays in resuming flows persist.

On the diplomatic front, US and Iranian officials are considering resuming talks, potentially in Pakistan, with mediation efforts under way to prevent renewed conflict following a temporary ceasefire that began on April 8. Meanwhile, Washington signalled it will not extend waivers allowing limited purchases of Iranian and Russian oil without sanctions.

Further supporting prices, US government data showed declines in crude, gasoline, and distillate inventories last week, driven by lower imports and higher exports as countries sought to offset disrupted supply.

Attribution: Reuters