Oil prices rose on Thursday as investors remained cautious over the outcome of diplomatic talks between Iran and Oman and the potential impact on crude flows through the Strait of Hormuz.
Renewed concerns over supply disruptions also emerged following reports of attacks on Saudi oil tankers in the Red Sea and Gulf of Aden, adding fresh geopolitical risk to the market.
Brent crude futures gained 46 cents, or 0.58%, to trade at $79.91 per barrel by 0640 GMT.
US West Texas Intermediate (WTI) futures increased by 36 cents, or 0.48%, to $75.58 per barrel.
Brent had closed slightly higher on Wednesday, while WTI ended the session marginally lower.
Market participants are closely monitoring discussions between Iran and Oman after Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, said Tehran and Muscat had reached an understanding on the geographic coordinates for a shipping route through the Strait of Hormuz.
Baghaei said a joint announcement was being prepared, provided certain third parties did not interfere.
“The current diplomatic exchanges have merely raised hopes that tensions could ease,” said Linh Tran, market analyst at XS.com.
“Risks related to military activity, maritime transportation and oil supply from the Middle East remain firmly in place,” she added.
A proposed agreement between Iran and Oman aimed at helping end the US-Iran conflict would reportedly allow Tehran to control access for ships entering the Gulf through the Strait of Hormuz, according to a senior Iranian source and two regional officials.
The proposal has not received immediate confirmation from Washington. While US President Donald Trump has said a deal to reopen the strait is imminent, American officials have repeatedly stated that they would not accept Iran controlling access to one of the world’s most important energy trade routes.
Iran has also warned Gulf countries that any future US military strike against its territory could trigger retaliation against critical energy infrastructure across the region.
Analysts said oil prices have returned to levels recorded after the United States and Iran signed an interim peace agreement on June 17, with investors watching closely for signs of a final deal.
Yuki Takashima, an economist at Nomura Securities, said uncertainty surrounding the negotiations and concerns over possible attacks on Red Sea shipping continue to limit optimism over a broader reduction in Middle East supply risks.
The market was further unsettled after Yemen’s Iran-aligned Houthi movement claimed responsibility for missile attacks on two Saudi oil tankers — one near the Red Sea port city of Yanbu and another in the nearby Gulf of Aden.
Saudi authorities have not confirmed either incident.
Shipping data showed that crude oil and condensate exports from Gulf countries remained largely stable in July but were still around 40% below pre-war levels.
Separately, US crude inventories increased as refinery activity slowed slightly and imports rose, according to data from the Energy Information Administration (EIA) released on Wednesday.
Despite diplomatic efforts to ease tensions, traders remain focused on whether geopolitical developments in the Middle East will disrupt global energy supplies or lead to a sustained easing of oil market risks.
