Oil Prices Rise as Iran Uranium Demands Dampen Hopes for Near-Term Peace Deal
Oil prices moved higher on Thursday after renewed tensions surrounding Iran’s uranium enrichment policy weakened expectations for a rapid peace agreement in the Middle East.
Investors are closely watching negotiations involving Iran and the United States, as any breakthrough could potentially reopen the Strait of Hormuz, one of the world’s most important energy shipping routes.
Brent and WTI Crude Extend Gains Amid Rising Geopolitical Concerns
Brent crude futures, the global benchmark for oil prices, climbed 1.9% to $106.98 per barrel.
Meanwhile, U.S. West Texas Intermediate (WTI) crude rose 2.7% to $100.84 per barrel during Thursday trading.
The gains reflect growing concerns that prolonged instability in the region could continue disrupting global energy supplies.
Iran’s Uranium Position Raises Questions Over Peace Negotiations
According to reports citing senior Iranian sources, Iran’s Supreme Leader Ayatollah Mojtaba Khamenei has instructed that the country’s highly enriched uranium should not be transferred abroad.
The report suggested this stance could complicate ongoing negotiations aimed at ending conflict in the region.
Separate reports indicated that U.S. President Donald Trump had reassured Israeli allies that Iran’s enriched uranium stockpile would leave the country under any future agreement.
However, the White House rejected those claims, reportedly describing the information as inaccurate.
Middle East Ceasefire Remains Fragile Despite Ongoing Talks
A fragile ceasefire has persisted since military conflict involving the United States, Israel, and Iran intensified earlier this year.
Diplomatic efforts to secure a lasting resolution have so far struggled to produce concrete progress.
President Trump previously stated negotiations had reached the “final stages,” while also warning that stronger military measures could follow if a peace deal fails.
Iran has maintained that it is reviewing Washington’s latest proposals but warned it remains prepared to respond forcefully to any further attacks.
Strait of Hormuz Remains Central to Global Oil Market Concerns
Iran recently announced a new “Persian Gulf Strait Authority” aimed at overseeing traffic through the Strait of Hormuz, after earlier proposals suggested introducing transit fees for vessels using the route.
The Strait of Hormuz remains a critical chokepoint for global energy markets.
Approximately 20% of worldwide oil supplies pass through the waterway, making any disruption a major catalyst for higher oil prices.
Before conflict escalated, Brent crude traded near $70 per barrel, significantly below current levels.
Recent shipping data indicated that some vessels have resumed limited movement through the channel, though uncertainty remains elevated.
U.S. Oil Inventories Record Larger-Than-Expected Decline
Additional support for oil prices came from fresh U.S. inventory data showing a substantial decline in crude stockpiles.
According to recent figures:
- U.S. crude inventories fell by 7.9 million barrels during the week ending May 15
- Market expectations had projected a decline of only 2.9 million barrels
The larger-than-expected drop reflects stronger exports and efforts by the United States to help offset supply shortages linked to disruptions near the Strait of Hormuz.
Gasoline Inventories Also Fall as Supply Pressures Persist
U.S. gasoline inventories decreased by 1.5 million barrels during the same period.
However, the decline was smaller than analyst expectations for a 2.1 million-barrel reduction.
The inventory figures suggest energy markets continue to experience pressure as geopolitical risks and supply concerns remain elevated.
