Oil prices declined on Thursday as renewed hopes for diplomatic progress between the United States and Iran eased some concerns about potential supply disruptions in the Middle East.
West Texas Intermediate (WTI) crude fell 1.30% to $101.40 a barrel, while Brent crude declined 0.86% to $114.30, giving back part of Wednesday’s gains.
The pullback followed a rebound in the previous session, when both benchmarks rose amid renewed concerns about threats to Saudi Arabia’s energy infrastructure and the risk of further escalation in the region.
Despite Thursday’s decline, crude prices remained elevated as traders weighed prospects for a diplomatic breakthrough against continuing security threats to oil production and transportation.
US-Iran Diplomatic Efforts Weigh on Prices
Market sentiment improved following reports that US Vice President JD Vance had contacted Iranian officials in an effort to revive peace negotiations.
Qatari mediators were also reported to be involved in presenting proposals aimed at ending the wider conflict, raising hopes that diplomatic efforts could reduce the risk of further disruptions to global energy supplies.
The prospect of renewed negotiations eased some of the geopolitical risk premium that had supported oil prices in recent sessions.
However, uncertainty remains over whether the reported contacts will lead to substantive negotiations or an agreement capable of stabilising the region.
Despite the diplomatic signals, continuing Houthi activity and concerns about attacks on energy infrastructure remained important considerations for traders.
Reports of an attack on Aden airport, alongside earlier Houthi claims involving Saudi Arabia’s Ras Tanura refinery has kept the security of regional infrastructure in focus.
