Oil prices top $105 as hopes fade for US-Iran breakthrough

Oil prices surged to above $105 a barrel on Thursday, as expectations for a diplomatic breakthrough between the United States and Iran faded. Brent, the benchmark for two-thirds of the world's oil, reached $105.33 a barrel, having jumped over 2.18% from the previous day. West Texas Intermediate, a gauge tracking US crude, increased by 1.77% to $93.79 per barrel. The resurgence in prices began on Wednesday as conflicting signals from Iran cast doubt on the prospects for a resolution to the ongoing conflict.

Reports indicated that Iran had presented the US with a roadmap to end their standoff, which includes a regionwide ceasefire, gradual reopening of the Strait of Hormuz, and an end to the US blockade. However, conflicting statements from Iranian officials, such as Foreign Ministry spokesman Esmaeil Baghaei and security chief Mohsen Rezaei, created uncertainty about Tehran's willingness to negotiate.

On Tuesday, supply chain concerns were alleviated following the reopening of Saudi Arabia's East-West pipeline, a crucial corridor for the world's largest oil exporter. The kingdom had also sold nearly 100 million barrels of oil to Asian buyers, ensuring a steady supply to meet market demands. Despite these developments, the oil market continued to price in potential supply disruptions, as Norbert Rucker, head of economics at Julius Baer, noted the persistent risk premium in oil prices.