Crude oil prices moved sharply higher on Thursday, snapping a three-session losing streak as fading expectations for a diplomatic breakthrough between the United States and Iran renewed concerns that Middle Eastern oil flows could remain constrained. Brent crude settled up $1.86, or 2.1%, at $89.70 per barrel, while WTI gained $1.30, or 1.6%, to settle at $83.53 per barrel.<\/p>\n\n\n\n
The rebound followed reports that the Trump administration is not interested in returning to the terms of the memorandum of understanding reached with Iran in June. Washington also confirmed that it is not currently engaged in talks with Tehran, despite renewed diplomatic efforts by regional mediators.<\/p>\n\n\n\n
The lack of progress toward a broader agreement caused investors to scale back expectations for a near-term increase in Middle Eastern oil supplies. The United States remains focused on applying additional economic pressure on Iran, while Tehran has continued to push back against the sanctions and warned against further escalation.<\/p>\n\n\n\n
Shipping through the Strait of Hormuz showed some improvement, with 10 commodity vessels transiting the waterway on Wednesday. While higher than recent lows, traffic remained below the 10-day average of 15 vessels and far below pre-conflict levels. Before the war began in late February, the Strait of Hormuz handled approximately one-fifth of global daily oil and liquefied natural gas supplies.<\/p>\n\n\n\n
Some regional refining capacity has also begun returning, with Kuwait’s 615,000-barrel-per-day Al-Zour refinery restarting all three crude units and operating at approximately 60% capacity as of August 19.<\/p>\n\n\n\n
With diplomatic efforts continuing but no direct negotiations between the United States and Iran underway, uncertainty surrounding the Strait of Hormuz and Middle Eastern oil flows remains a key source of support for crude prices.<\/p>\n\n\n\n