Crude oil markets extended gains on Thursday, with Brent rising 0.4% to $105.91 and West Texas Intermediate up 0.3% to $99.32, as traders weighed progress in US–Iran talks against a stark decline in global stockpiles. The moves followed a 5.6% rout a day earlier, underscoring extreme sensitivity to diplomatic headlines and the precarious supply backdrop.
President Trump said the US is in the “final stages” of negotiations with Iran but warned that military action remains on the table if no deal is reached. Tehran, meanwhile, launched a new “Persian Gulf Strait Authority” to control shipping traffic through the Strait of Hormuz, a waterway that handles roughly 20% of global oil flows. Ship-tracking data shows traffic remains severely depressed, with only a handful of tankers crossing in recent days. Abu Dhabi National Oil CEO Sultan Al Jaber cautioned that full recovery of Middle East oil exports could take until well into 2027.
Compounding the supply anxiety, the US Energy Information Administration reported a 7.9-million-barrel drop in commercial crude inventories for the week ended May 15—nearly triple the expected draw. The International Energy Agency has warned that global stockpiles are “depleting rapidly,” leaving scant cushion against further disruptions. Goldman Sachs noted that crude and product inventories are being drawn at a record pace this month.
Analysts underscored the lag between any peace framework and physical normalisation. Warren Patterson, head of commodities strategy at ING Economics, said, “The oil market remains overly sensitive to Iran-related headlines… even if a peace deal is reached, physical barrels will take weeks to normalize.” Joe DeLaura of Rabobank added that “it takes up to 55 days to get oil from the Persian Gulf to its destination,” meaning price volatility will persist regardless of diplomatic progress.
From a technical perspective, Brent held firmly above the psychologically important $100 level, while WTI hovered just below triple digits. Traders expect Brent to range between $102 and $108, with WTI oscillating between $97 and $101, though wide intraday swings are anticipated as each new headline hits the tape.
