Oil gains as traders weigh prospects of Hormuz reopening

Brent crude prices climbed 2.1% on Thursday, ending a three-day downward trend, after a Wall Street Journal report claimed President Donald Trump has no intent to renew terms of the June memorandum of understanding with Iran. The report, based on sources familiar with the situation, said the Trump administration repeatedly told mediators it has no intention of reviving the June agreement, complicating ongoing diplomatic efforts to restart negotiations.

Brent crude futures closed at $89.70 a barrel, up $1.86, or 2.1%, while U.S. West Texas Intermediate crude settled at $83.53, up $1.30, or 1.6%. Market participants scaled back expectations of a diplomatic breakthrough that could increase oil exports from the Middle East, allowing prices to rebound. Analyst Giovanni Staunovo from UBS noted a lack of progress in talks and restricted flows may have influenced market views.

Washington confirmed it was not engaged in discussions with Iran, despite diplomatic efforts by other nations. Trump stated the U.S. aimed to penalize countries doing business with Tehran and would impose further sanctions on the Islamic Republic. The Strait of Hormuz, responsible for approximately one-fifth of daily global oil and liquefied natural gas supplies, saw increased vessel traffic on Wednesday, but still lagged behind the 10-day average.

The ongoing sanctions and geopolitical tensions complicate efforts to resolve the dispute, particularly regarding Iran's nuclear program, which remains a central issue.