Oil prices moved higher on Thursday, with benchmarks gaining around 3% after intraday spikes driven by escalating geopolitical tensions in Iran. Brent crude settled at $105.07 per barrel, up 3.1%, while U.S. West Texas Intermediate (WTI) rose 3.11% to $95.85. Prices briefly surged by roughly $5 earlier in the session before paring gains.
The move was fueled by reports of heightened instability in Iran, including air defense activity over Tehran and signs of internal political friction. The reported resignation of a senior Iranian negotiator was viewed as a shift toward a more hardline stance, raising doubts about near-term diplomatic progress.
Geopolitical risk remains centered on the Strait of Hormuz, where both the U.S. and Iran continue to restrict maritime traffic. The waterway, which previously handled roughly 20% of global oil flows, is still operating well below normal levels. Recent developments—including vessel seizures, military threats, and continued naval enforcement—underscore the fragile state of transit through the region.
Despite the disruptions, some oil shipments continue to move, suggesting partial leakage through the blockade. However, uncertainty around enforcement, combined with conflicting political signals, continues to inject volatility into the market.
Market sentiment remains divided. While ongoing disruptions support prices, there is still a prevailing expectation among some participants that a resolution will eventually emerge. Survey data indicates a wide range of views on when normal shipping conditions might resume, reinforcing the uncertain outlook.