LONDON, April 16 (Reuters) — Oil prices climbed on Thursday, rebounding from earlier losses as investors grew uncertain about whether ongoing U.S.-Iran peace talks would successfully end the conflict that has severely disrupted energy supplies in the Middle East.
Brent crude futures rose by $1.65, or 1.7%, to reach $96.58 per barrel by 0832 GMT, while U.S. West Texas Intermediate (WTI) crude gained $1.45, or 1.6%, to $92.74 per barrel. Both benchmarks had closed nearly flat on Wednesday after experiencing significant volatility throughout the session.
“We remain sceptical about any immediate resolution to the conflict,” said PVM oil analyst John Evans. “For every positive headline, there seems to be a counterpoint.”
The ongoing U.S.-Israeli conflict with Iran has caused severe disruption to global oil and gas supplies, including the suspension of traffic through the Strait of Hormuz, a key route that typically handles around 20% of the world’s oil and liquefied natural gas shipments.
Possible resumption of peace talks
Officials from the United States and Iran are considering resuming negotiations in Pakistan as early as this weekend. Meanwhile, Pakistan’s army chief arrived in Tehran on Wednesday in a mediatory role.
According to a source familiar with Tehran’s position, Iran may allow ships to resume passage through the Omani side of the Strait of Hormuz if an agreement is reached to prevent further conflict, following a two-week ceasefire that began on April 8.
In another sign that military tensions may be easing, Israel’s cabinet reportedly met on Wednesday to discuss developments in neighbouring Lebanon, according to a senior Israeli official, more than six weeks into its conflict with Iran-backed Hezbollah.
Analysts at ING estimate that around 13 million barrels per day of oil flow has been disrupted due to the closure of the Strait of Hormuz, even after accounting for pipeline rerouting and the limited number of tankers still passing through the route.
With the U.S. blockade on Iranian ports announced following the collapse of peace talks over the weekend, analysts warn that the disruption could worsen further.
U.S. Treasury Secretary Scott Bessent also stated that Washington will not renew sanctions waivers for certain Iranian and Russian oil exports.
Highlighting tight global supply conditions, the U.S. Energy Information Administration reported on Wednesday that inventories of crude oil, gasoline, and distillate fuels fell last week. Increased demand for replacement barrels has driven higher exports while reducing imports, further tightening the market.
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