Brent crude futures rose $1.41, or 1.41%, to $101.47 per barrel, while US West Texas Intermediate (WTI) crude gained $1.12, or 1.18%, to $95.93 per barrel. Prices had surged over 3% at the market opening before easing slightly.
The rebound came after three consecutive days of declines driven by reports suggesting Washington and Tehran were nearing a temporary agreement that could reduce tensions and partially reopen the Strait of Hormuz.
However, fresh clashes shattered optimism surrounding the negotiations. Iran accused the United States of violating the month-long ceasefire, while Washington claimed its military action was a response to Iranian attacks on US naval vessels passing through the strait.
Iran’s military alleged that US strikes targeted an Iranian oil tanker, another vessel, and civilian areas both in the strait and on Iranian territory.
Despite the escalation, US President Donald Trump insisted later on Thursday that the ceasefire technically remained in place.
The latest confrontation unfolded as the US awaited Tehran’s response to a new peace proposal. The proposal reportedly avoided addressing major disagreements, including Washington’s demand for the full reopening of the Strait of Hormuz, which previously handled nearly one-fifth of the world’s oil and gas supply before the conflict erupted on February 28.
Market analysts warned that global supply concerns continue to support higher oil prices. IG analyst Tony Sycamore said the overall supply outlook remains tight, while a broader peace agreement still appears distant.
Separately, Reuters reported that the US Commodity Futures Trading Commission is investigating nearly $7 billion worth of oil trades made ahead of major Iran war-related announcements by President Trump.
According to the report, many of the trades involved short positions placed on major exchanges before Trump announced delays in attacks or ceasefire developments that triggered sharp declines in oil prices.
