Brent crude oil prices stabilized around $105 per barrel on Thursday, after a volatile trading session marked by renewed optimism over possible US–Iran diplomatic progress and lingering fears over Middle East supply disruptions.
The benchmark had fallen sharply earlier in the week, losing nearly 6% across two sessions, after reports suggested that Washington and Tehran were exploring a potential framework to de-escalate tensions. However, sentiment quickly turned cautious as investors weighed conflicting signals from both sides of the negotiations.
US President Donald Trump indicated that he was willing to allow additional time for Iran to respond to the latest proposal, stating he was waiting to “get the right answers” from Tehran. Iran, meanwhile, confirmed it was reviewing the US offer, but stopped short of signaling any breakthrough.
Market anxiety was further heightened after Iran announced the creation of a “Persian Gulf Strait Authority”, a new body tasked with regulating maritime movement through the Strait of Hormuz. The move has been interpreted by analysts as an attempt to formalize tighter oversight of one of the world’s most critical oil shipping routes.
Despite brief optimism in diplomatic talks, oil markets remain underpinned by persistent geopolitical risk. According to market data, Brent crude rose slightly in recent trading to about $105.4–$105.8 per barrel, reflecting a modest rebound after earlier losses, as traders reassessed supply risks linked to the Strait of Hormuz.
The Strait, through which roughly a fifth of global oil flows, remains the central pressure point in the market. Any disruption or tightening of passage conditions continues to add a “risk premium” to global crude prices.
Supply fundamentals are also contributing to price support. US crude inventories have continued to fall, while recent large withdrawals from strategic reserves have reinforced concerns about tightening global supply conditions. Analysts note that sustained drawdowns could keep prices elevated even if geopolitical tensions ease in the short term.
Despite short-term volatility, oil prices remain significantly higher than pre-conflict levels, up nearly 50%, reflecting prolonged uncertainty, restricted flows through key shipping routes, and ongoing market sensitivity to developments in the US–Iran standoff.
For now, traders say the market is caught between two competing forces: hopes of a diplomatic breakthrough and fears that any breakdown in talks could quickly push prices higher again.
