Oil prices edged higher in Asian trade on Thursday as the United States and Iran sought to ease tensions over Tehran’s nuclear programme, even as military activity increased in the key oil-producing region.
Brent crude futures rose 24 cents, or 0.3 per cent, to $70.59 a barrel as of 0415 GMT. U.S. West Texas Intermediate (WTI) crude gained 28 cents, or 0.4 per cent, to trade at $65.47 a barrel.
Both benchmarks had settled more than 4 per cent higher on Wednesday, marking their strongest close since January 30, as traders priced in potential supply disruptions linked to fears of a possible conflict between United States and Iran.
Analysts say the main risk to the oil market is that escalating tensions could disrupt shipping through the Strait of Hormuz, a critical passage for global energy supplies. About 20 per cent of the world’s oil consumption passes through the narrow waterway.
ANZ analysts noted in a report that while diplomatic efforts are ongoing, the heightened military posture on both sides continues to support oil prices.
Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said tensions between Washington and Tehran remain elevated.
“However, the prevailing view is that full-scale armed conflict is unlikely, prompting a wait-and-see approach,” he said.
Market participants are closely monitoring developments in the region, as any disruption to supply routes could further tighten global oil markets and drive prices higher.
