Global oil prices rebounded in Asian trading on Thursday, rising more than 2 per cent as markets reacted to mixed signals surrounding potential de-escalation in the Middle East, with Iran reportedly reviewing a U.S.-backed proposal to end the ongoing conflict.
Brent crude futures for May delivery climbed 2.3 per cent to $104.54 per barrel, while U.S. West Texas Intermediate (WTI) crude also gained 2.3 per cent to $92.32 per barrel. The recovery follows a decline of over 2 per cent in the previous session.
Investor sentiment remains highly sensitive to geopolitical developments, particularly as Tehran weighs a proposal aimed at halting hostilities. Although Iran has not formally accepted the plan, it has refrained from outright rejection, fueling cautious optimism among traders that a diplomatic resolution may still be possible.
However, uncertainty continues to dominate the market outlook. Iranian authorities have publicly denied engaging in direct negotiations with Washington, while signalling that significant differences remain unresolved. This lack of clarity has kept oil traders on edge, with prices reacting sharply to every new development.
The ongoing conflict has significantly disrupted energy flows from the Gulf region, a critical hub for global crude supply. Brent crude had earlier risen above $119 per barrel this month amid fears of prolonged supply outages, underscoring the scale of geopolitical risk priced into the market.
Wednesday’s price decline had been driven by reports suggesting potential diplomatic progress, which temporarily eased the geopolitical risk premium embedded in crude markets. Yet, conflicting signals from U.S. officials, who have warned of tougher measures if Iran fails to engage constructively, have added another layer of uncertainty.
Beyond geopolitics, market fundamentals are also exerting downward pressure on prices. Fresh data from the U.S. Energy Information Administration (EIA) revealed a significant build-up in crude inventories, pointing to softer demand conditions in the world’s largest oil consumer.
