Oil prices have fallen as expectations rise for a lasting ceasefire between the United States and Iran from another round of talks set to take place in Pakistan. However, uncertainty remains high, as the Strait of Hormuz continues to be blocked, keeping the market under tension. Brent crude rose 4.7% on Thursday, nearing $98 per barrel, while West Texas Intermediate traded close to $94 per barrel.
U.S. President Donald Trump struck an optimistic tone about the possibility of a long-term ceasefire, stating that Iran had accepted some long-discussed conditions, including the opening of the Strait of Hormuz. However, Tehran has not publicly confirmed these claims.
According to officials, some Arab Gulf and European leaders estimate that a peace agreement could take up to six months to finalize, emphasizing the need to extend the ceasefire during this period.
The global oil market has been shaken by the conflict, which is nearing its 50th day. The clashes have caused major supply disruptions, as Iran has significantly restricted maritime traffic in the Strait of Hormuz, a key chokepoint for about one-fifth of global oil flows. Recently, the United States has also imposed a naval blockade in the area.