Crude Oil Prices Extend Gain for Fifth Consecutive Day Amid Concerns Over Trump's Iran Diplomacy

Oil Prices Surge Amid Escalating Tensions with Iran

Oil prices continued to rise on Thursday for a fifth consecutive day, as the prospect of Iran agreeing to more in-person peace talks with the US appears increasingly unlikely. West Texas Intermediate rose to approximately $97 a barrel, while Brent closed near $105, marking a week-on-week advance of about 16%.

The ongoing conflict in the Middle East has been a significant concern for energy markets since it began at the end of February, with the near-closure of the Strait of Hormuz causing a sharp drop in flows from major oil and gas producers in the Persian Gulf. The tensions have been exacerbated by the increasing military threats and rhetoric from both sides, leading to a geopolitical premium being injected into oil prices.

According to US officials familiar with the matter, President Donald Trump's threats and social media posts have been detrimental to ongoing negotiations through mediators such as Pakistan. The naval blockade of Iranian ports, which Trump has continued, has also contributed to the escalation of tensions.

Read also: Japan's Inflation Accelerates Amid Rising Oil Costs and Ahead of BOJ Policy Decision

A comparison of oil prices over the past week can be seen in the following table:

The Strait of Hormuz remained largely frozen on Thursday, with only occasional movements of Iran-linked vessels breaking the lull. Meanwhile, American forces boarded a supertanker carrying Iranian oil in the Indian Ocean, as the navy stepped up its blockade of the Islamic Republic's shipping.

Efforts to revive talks between Washington and Tehran remain deadlocked on several key issues, including the Islamic Republic's nuclear capabilities and Israeli strikes on Lebanon. The ceasefire in Lebanon has been extended by three weeks, Trump announced in a social media post.

Read also: Dollar Volatility Driven by Geopolitical Tensions Rather Than Economic Data