Oil prices continued to climb on Thursday, rising by more than $1 as a lack of progress in negotiations between Iran and the United States, combined with ongoing restrictions in the Strait of Hormuz, kept supply concerns elevated.
Brent crude futures (LCOc1) gained $1.26, or 1.2%, to reach $103.17 per barrel at 06:30 GMT, after closing above $100 for the first time in over two weeks on Wednesday. U.S. West Texas Intermediate futures (CLc1) also rose, adding $1.20, or 1.3%, to $94.16.
Both benchmarks had already surged by more than $3 in the previous session, supported by larger-than-expected declines in U.S. gasoline and distillate inventories, alongside the absence of meaningful progress in Iran peace talks.
“The oil market is repricing expectations with little sign of progress in finding a resolution in the Persian Gulf,” analysts at ING said in a note, adding that hopes for a diplomatic 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.”
Strait of Hormuz tensions remain in focus
Although U.S. President Donald Trump extended the ceasefire following mediation efforts by Pakistan, both Iran and the United States continue to impose limits on shipping through the Strait of Hormuz—a route that handled roughly 20% of global daily oil supply before the conflict began on February 28.
Iran seized two vessels in the strait on Wednesday, tightening control over the strategic chokepoint. At the same time, the U.S. has maintained its naval blockade on Iranian maritime trade. Iranian parliament speaker and lead negotiator Mohammad Baqer Qalibaf said a comprehensive ceasefire would only be viable if the blockade is lifted.
Meanwhile, U.S. forces have intercepted at least three Iranian-flagged tankers in Asian waters and redirected them away from areas near India, Malaysia, and Sri Lanka, according to shipping and security sources.
With the ceasefire extension announced on Tuesday, Trump once again stepped back from earlier warnings of potential strikes on Iranian infrastructure, including power plants and bridges. The White House has not provided a specific timeline for the duration of the ceasefire, press secretary Karoline Leavitt told reporters.
U.S. exports hit record levels
On the trade front, U.S. exports of crude oil and refined products rose by 137,000 barrels per day to a record 12.88 million bpd, as buyers in Asia and Europe increased purchases amid supply disruptions linked to the Iran conflict.
According to the Energy Information Administration, U.S. crude inventories increased while fuel stocks declined.
Crude stockpiles rose by 1.9 million barrels, compared with expectations from a Reuters survey for a 1.2 million-barrel draw.
Gasoline inventories dropped by 4.6 million barrels, exceeding forecasts for a 1.5 million-barrel decline, while distillate stocks fell by 3.4 million barrels versus expectations of a 2.5 million-barrel decrease.