By Boluwatife Oshadiya
Key Points
- Brent crude climbed above $101 per barrel amid uncertainty over US-Iran negotiations.
- Investors remain concerned about oil supply flows through the Strait of Hormuz.
- US crude and gasoline inventories declined, supporting bullish oil sentiment.
- Conflicting signals from Washington and Tehran continue to unsettle the energy market.
Main Story
Global crude oil prices rebounded on renewed market uncertainty surrounding ongoing diplomatic negotiations between the United States and Iran, as traders weighed geopolitical tensions against the possibility of a fresh nuclear agreement.
International benchmark Brent Crude rose to $101.65 per barrel, representing a 0.38 per cent increase from the previous trading session. Meanwhile, West Texas Intermediate crude gained 0.45 per cent to trade at $95.54 per barrel.
The latest price rally follows growing concerns over potential disruptions to energy shipments through the Strait of Hormuz, a strategic shipping corridor responsible for transporting a significant share of global crude exports.
Oil prices had briefly slipped below the $100 threshold after reports emerged on May 6 that Washington and Tehran were nearing a preliminary memorandum of understanding aimed at reducing tensions and reopening broader nuclear discussions.
According to reports, US President Donald Trump expects diplomatic progress on the proposed agreement after concluding his official visit to China next week.
US media outlet Axios, citing officials familiar with the negotiations, reported that Tehran is expected to respond to the proposed framework within 24 to 48 hours.
Speaking during a White House event, Trump stated that discussions with Iran had been “very productive,” adding that a deal remained highly possible as both sides continued engagement efforts.
However, Tehran appeared less optimistic about the negotiations. Iranian Foreign Ministry spokesman Esmaeil Baghaei accused Washington of failing to demonstrate sincerity in the talks.
In a statement posted on social media platform X, Baghaei argued that successful negotiations require “good faith” and warned against coercive diplomacy.
Market volatility also intensified after the US Central Command announced the seizure of an Iranian-flagged vessel in the Gulf of Oman, alleging the ship attempted to breach an existing blockade.
Analysts said the development further heightened fears of possible disruptions to Middle East oil supply chains, especially as geopolitical tensions continue to influence global energy markets.
Inventory Data Supports Bullish Momentum
Additional support for oil prices came from fresh inventory figures released by the US Energy Information Administration (EIA), which showed a decline in American crude and gasoline stockpiles.
The EIA reported that US commercial crude oil inventories dropped by 2.3 million barrels last week to 457.2 million barrels, signaling resilient fuel demand despite concerns over global economic growth.
Strategic petroleum reserves also declined by 5.2 million barrels to 392.7 million barrels during the same period.
Gasoline inventories fell by approximately 2.5 million barrels to 219.8 million barrels, reinforcing expectations of strong summer driving demand across the United States.
Energy analysts noted that lower inventory levels, combined with unresolved geopolitical tensions in the Middle East, could keep oil prices elevated in the near term.
What’s Next
Market participants are expected to closely monitor diplomatic developments between Washington and Tehran over the coming days, alongside updates on global crude supply and shipping security in the Gulf region.
Analysts say any breakthrough in nuclear negotiations could ease supply concerns and pressure oil prices lower, while renewed conflict or sanctions escalation may trigger another sharp rally in global energy markets.
