Oil prices dipped slightly on Thursday following sharp gains in the previous session, as investors assessed stalled negotiations between Iran and the United States, along with continued disruptions to key shipping routes such as the Strait of Hormuz.
Brent crude futures fell 15 cents to $101.76 per barrel after crossing the $100 mark for the first time in over two weeks, while West Texas Intermediate (WTI) slipped 14 cents to $92.82. Both benchmarks had surged by more than $3 in the previous session.
The earlier rally was fuelled by a larger-than-expected draw in US fuel inventories and persistent uncertainty surrounding diplomatic progress between Washington and Tehran.
Supply fears dominate sentiment
Markets remain highly sensitive to geopolitical risks, particularly as both Iran and the United States continue to restrict maritime movement through the Strait of Hormuz—a vital corridor that previously handled about 20% of global oil and LNG flows.
Tensions escalated further after Iran reportedly seized two ships in the strait, tightening its grip over the waterway. Meanwhile, the US has maintained a naval blockade on Iranian trade routes. Iranian parliamentary speaker Mohammad Bagher Ghalibaf stated that any meaningful ceasefire would require lifting the blockade, highlighting the ongoing deadlock.
Shipping disruptions and military pressure
According to shipping and security sources, US forces have intercepted multiple Iranian-flagged tankers in Asian waters, redirecting them away from areas near India, Malaysia, and Sri Lanka.
US President Donald Trump has extended the ceasefire following mediation efforts by Pakistan, though no timeline has been set for its conclusion. The White House indicated that the pause in hostilities will continue as long as diplomatic efforts remain underway.
US exports surge despite mixed inventory data
On the supply front, US energy exports have climbed to record levels, with total shipments of crude oil and petroleum products rising to 12.88 million barrels per day, according to the Energy Information Administration, as global buyers increasingly turn to American supplies amid disruptions linked to the conflict.
However, domestic inventory figures presented a mixed picture. Crude stocks rose by 1.9 million barrels—contrary to expectations of a draw—while gasoline inventories fell by 4.6 million barrels and distillate stocks dropped by 3.4 million barrels, reflecting uneven demand trends.
