Oil Prices Rise as Brent Approaches $100
Oil prices moved higher on Thursday but remained just below the key $100 per barrel level, as investors weighed ongoing diplomatic efforts between the United States and Iran. Market sentiment was supported after President Donald Trump announced a ceasefire between Israel and Lebanon and invited both nations’ leaders to Washington for talks.
At 14:39 ET (18:39 GMT), Brent crude futures climbed 4.5% to $99.21 per barrel, while U.S. West Texas Intermediate (WTI) gained 3.4% to $94.40 per barrel.
Market Structure Signals Short-Term Supply Tightness
Analysts noted that oil forward curves continue to reflect backwardation, indicating tighter supply in the short term that is expected to ease later in the year.
However, the degree of backwardation has softened compared to previous days, suggesting that markets are beginning to price in more clarity around the current geopolitical situation.
U.S. Blockade of Iranian Ports Keeps Tensions Elevated
Despite optimism around diplomatic progress, tensions remain high due to the ongoing U.S. blockade of Iranian ports. U.S. Central Command confirmed that 14 vessels have been turned away after three days of enforcement.
Military officials clarified that the blockade targets Iranian ports and coastlines, rather than the critical Strait of Hormuz. However, they warned that vessels could face boarding and seizure if the blockade is not respected.
Iran has strongly opposed the move, with senior military figures cautioning against its continuation.
Global Oil Supply Disruptions Add Up
The conflict has significantly disrupted global oil flows. With the Strait of Hormuz effectively restricted and supply routes diverted, analysts estimate that around 13 million barrels per day have been impacted.
There are growing concerns that supply disruptions could worsen if diplomatic negotiations fail, as differences between the U.S. and Iran remain substantial.
Ceasefire and Diplomacy Offer Market Support
At the same time, diplomatic developments have provided some relief to markets. The U.S. and Iran have agreed in principle to resume negotiations, although no official timeline has been set.
Investor sentiment improved after the announcement of a 10-day ceasefire between Israel and Lebanon, marking a rare moment of de-escalation in the region.
President Trump also signaled optimism, stating that Iran is close to reaching a deal and that discussions are progressing positively.
China Growth Boosts Oil Demand Outlook
On the demand side, China’s economy delivered stronger-than-expected growth in the first quarter of 2026, expanding by 5% year-on-year.
The data provided some support for oil demand expectations, given China’s position as the world’s largest crude importer. However, uncertainty remains due to the ongoing geopolitical tensions and China’s reliance on Iranian oil imports.
