Oil prices climbed on Thursday, recovering some of the previous day’s losses as investors reexamined prospects for de-escalation in the Middle East as Iran said it was still reviewing a U.S. proposal to end the war, which has disrupted energy flows.
Brent futures rose $1.13, or 1.1%, to $103.35 a barrel by 0051 GMT, while U.S. West Texas Intermediate crude futures were up $1.08, or 1.2%, at $91.40 a barrel.
Both benchmarks slumped more than 2% on Wednesday.
Despite reviewing the proposal, Iran has no intention of holding talks to end the widening Middle East conflict, the country’s foreign minister said on Wednesday.
U.S. President Donald Trump will hit Iran harder if Tehran fails to accept that the country has been “defeated militarily”, White House press secretary Karoline Leavitt said.
“Optimism regarding a ceasefire has faded,” said Tsuyoshi Ueno, senior economist at NLI Research Institute.
He added that the bar set by Washington appeared high, leaving oil prices vulnerable to further volatility depending on negotiations and military actions by both sides.
Trump’s 15-point proposal, sent through Pakistan, calls for removing Iran’s stocks of highly enriched uranium, halting enrichment, curbing its ballistic missile program and cutting off funding for regional allies, according to three Israeli cabinet sources familiar with the plan.
The conflict has all but halted shipments through the Strait of Hormuz, which typically carries about one-fifth of the world’s crude oil and liquefied natural gas supply. The International Energy Agency has called it the biggest-ever oil supply disruption.
India, meanwhile, has bought its first cargo of Iranian liquefied petroleum gas in years after the U.S. temporarily removed sanctions on Tehran’s oil and refined fuels, sources said.
Japanese Prime Minister Sanae Takaichi asked IEA chief Fatih Birol for an additional coordinated release of oil stockpiles during talks on Wednesday, as Tokyo seeks to hedge against a prolonged Middle East conflict.
Iraqi oil production has slumped, with storage tanks reaching high and critical levels, three Iraqi energy officials said on Wednesday.
Adding to supply concerns, at least 40% of Russia’s oil export capacity is at a halt following Ukrainian drone attacks, a disputed attack on a major pipeline and the seizure of tankers, according to Reuters calculations based on market data.
U.S. crude inventories rose by 6.9 million barrels to 456.2 million barrels in the week ended March 20, the highest since June 2024 and far exceeding analysts’ expectations in a Reuters poll for a 477,000-barrel increase.
(Reporting by Yuka Obayashi; Editing by Edmund Klamann and Kevin Buckland)