OIL prices edged lower in early Thursday trading as cautious optimism over a potential easing of tensions between the United States and Iran outweighed persistent concerns about disrupted global energy supplies.
Reuters cited that Brent crude futures fell 44 cents, or 0.5 per cent, to US$94.49 a barrel, while US West Texas Intermediate declined 70 cents, or 0.8 per cent, to US$90.59. Both benchmarks had closed largely unchanged in the previous session.
Sentiment was lifted by reports that Iran could allow vessels to pass through parts of the Strait of Hormuz if diplomatic efforts succeed in preventing further escalation.
A source familiar with Tehran’s position indicated that ships might be permitted to sail through the Omani side of the strategic waterway under a potential agreement.
The White House expressed optimism about reaching a deal to end the conflict, while maintaining that economic pressure on Iran would intensify if negotiations fail.
“While there are hopes for de-escalation, many investors remain sceptical, given that US-Iran talks have repeatedly broken down even after appearing to make progress,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
“Until a peace deal is reached and free navigation through the strait is restored, WTI prices are expected to continue fluctuating between US$80 and US$100,” he added.
The conflict involving the United States, Israel and Iran has triggered one of the most severe disruptions to global oil and gas flows, largely due to Iran’s curtailment of traffic through the Strait of Hormuz, a vital corridor that typically carries around one-fifth of the world’s oil and liquefied natural gas.
Diplomatic efforts remain active, with US and Iranian officials considering a return to Pakistan for renewed talks as early as this weekend after earlier negotiations ended without a breakthrough. Pakistan’s army chief has already travelled to Tehran in an effort to sustain dialogue and prevent a resumption of hostilities.
Despite these efforts, supply risks remain elevated. The United States has imposed a naval blockade on Iranian ports, effectively halting maritime trade to and from the country, while also tightening sanctions enforcement.
US Treasury Secretary Scott Bessent confirmed that Washington will not renew waivers that had allowed limited purchases of Iranian and Russian oil without triggering sanctions.
Further complicating the outlook, US crude inventories unexpectedly declined by 913,000 barrels to 463.8 million barrels in the week ended April 10, according to the US Energy Information Administration, contrasting with market expectations for an increase.
The competing forces of geopolitical uncertainty and tentative diplomatic progress continue to shape oil market volatility, with traders closely watching developments around the Strait of Hormuz as a key determinant of price direction. - April 16, 2026
