Brent crude settled up $1.73, or 2.45%, at $72.48 a barrel, while U.S. West Texas Intermediate rose $1.81, or 2.78%, to $67.02. Both benchmarks traded at their highest levels since July and August, respectively, and were on track for solid weekly gains.
Although U.S. and Iranian officials agreed to extend indirect negotiations into next week following talks in Geneva, market skepticism grew over the likelihood of a breakthrough. President Donald Trump has demanded that Iran halt uranium enrichment, setting a short deadline for a deal, while Tehran has resisted key U.S. conditions.
Crude prices initially spiked during Thursday’s talks on reports that discussions had stalled, before easing slightly after Oman’s foreign minister said progress had been made and technical-level discussions would resume next week in Vienna. Still, traders appear increasingly focused on the risk that diplomacy could fail.
Geopolitical risk premiums of roughly $8 to $10 per barrel are estimated to be embedded in current prices, reflecting fears that any military confrontation could disrupt flows through the Strait of Hormuz — a chokepoint that handles about 20% of global oil supply.
To offset potential disruptions, Gulf producers are preparing contingency measures. Abu Dhabi is expected to boost exports of its flagship Murban crude in April, while Saudi Arabia has signaled it could raise output and may increase its official selling prices to Asia for the first time in five months, supported by stronger Indian demand replacing Russian supplies.
Meanwhile, OPEC+ is widely expected to consider increasing output by around 137,000 barrels per day at its March 1 meeting as it begins unwinding a pause in supply hikes.