Oil prices rose on Thursday, hovering above $103 a barrel, aided by scant signs of fresh talks between the U.S. and Iran and ongoing disruptions to shipping activity in the Strait of Hormuz after attacks on vessels this week.
Brent oil futures, the global benchmark, climbed 1.9% to $103.82 a barrel, while U.S. West Texas Intermediate crude futures gained 2.00% to $94.83 a barrel by 05:48 ET (09:48 GMT).
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Crude jumped back above $100 a barrel on Wednesday after Iran attacked three ships in the Strait of Hormuz, seizing two of them, in a sign that Tehran was attempting to strenghten its hold over the crucial shipping conduit. Tehran said the attacks were in retaliation to an ongoing American blockade of Iran’s ports.
The status of more U.S.-Iran peace talks has remained unclear, even after Trump indefinitely extended a two-week ceasefire earlier this week. Washington was also seen pursuing Iranian vessels in broader Asian waters, media reports said.
Both sides appear to be at an impasse. Iran has ruled out the possibility of any further negotiations as long as the U.S. maintains its naval blockade, while Trump has called on Tehran to fully reopen the Strait of Hormuz before any major peace deal can be signed.
"The market is having to reprice expectations," analysts at ING said in a note. “As hopes fade, the reality of the supply disruption will set in, leaving further upside for prices. If no progress is made, the market will become increasingly numb to the noise and headlines that have dictated price action recently.”
A narrow waterway off of Iran’s southern coast, the Strait of Hormuz has become a key point of focus in the Iran conflict, with its effective closure blocking roughly 20% of global oil supplies. Economies in Asia and the Middle East are expected to be hit particularly hard by the stoppage, although fears remain that the energy shock could imperil the global economy.
U.S. oil exports hit record high Elsewhere, U.S. oil and petroleum product exports hit a record high of 12.88 million barrels per day in the past week, amid rapidly increasing demand in Europe and Asia due to disruptions in Middle East supplies.
Local gasoline demand was also elevated, with gasoline inventories down nearly 4.6 million barrels in the past week, compared to expectations for a 1.5 million barrel draw, data from the Energy Information Administration showed. Distillate stockpiles fell 3.4 million barrels against expectations for a 2.5 million draw.
It was a tenth consecutive week of gasoline inventory draws. But overall U.S. inventories rose 1.9 million barrels in the past week, compared to expectations for a 1.9 million barrel draw.
