Brent crude futures were up 44 cents, or 0.4%, at $105.5 a barrel, while US West Texas Intermediate crude futures were up 50 cents, or 0.51%, at $98.76 a barrel.
Iran said on Wednesday it was investigating a new proposal by the US to end the raging war in the Middle East, while US President Donald Trump described the talks as a “border line” between a deal and renewed strikes.
“It’s right on the borderline, believe me… If we don’t get the right answers, it goes very quickly. We’re all ready to go,” Trump told reporters, explaining that the window for diplomacy could close soon.
Meanwhile, Iranian Foreign Ministry spokesman Ismail Bakai said Tehran had “received the views of the American side” and was investigating them. He reiterated Iran’s demands for the release of fixed assets and an end to the US blockade of Iranian ports.
Earlier, Iran’s chief negotiator Mohammad Baghar Ghalibaf accused the US of trying to restart the war after Trump’s fresh threats. Ghalibaf warned of a “strong response”, while Iran’s Revolutionary Guards said any renewed conflict would spread far beyond the Middle East.
“The enemy’s movements, both overt and covert, show that despite economic and political pressure, it has not abandoned its military objectives and wants to start a new war,” Ghalibaf said. While a deal remains elusive, the April 8 cease-fire that prevented open fighting between Iran and the United States-Israel remains fragile.
Iran announced a new “Persian Gulf Straits Authority” on Wednesday, saying the Strait of Hormuz would have a “controlled maritime zone”.
Oil prices, however, continue to hover above $100 a barrel amid a prolonged blockade on the Strait of Hormuz, a narrow 33-kilometer waterway connecting the Persian Gulf to the Gulf of Oman that handles 20% of the world’s daily oil and gas shipments.
What’s next?
Notably, both benchmarks fell about 6% on Wednesday after Trump said negotiations with Iran were in the final stages, but also threatened more strikes if he did not agree to a peace deal.
“If Trump insists on making any concessions to Iran, a deal seems unlikely, and the final outcome of the talks could quickly reverse,” Haitong Futures analyst Yang An said as quoted by Reuters.
“Decreasing oil inventories will make it difficult for oil prices to stay low,” added Mingyu Gao, chief researcher for energy and chemicals at China Futures.
“Due to the blockade of the Strait of Hormuz, global refined-product and onshore crude inventories are expected to fall below their lowest levels for this time of year in the past five years between late May and late June,” Gao said.
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