Oil prices increased by approximately 2% on Thursday, recovering from the previous session's losses, as market concerns grew that ongoing fighting in the Middle East would further disrupt energy supplies. As of 06:38 GMT, Brent crude futures rose by $2.08, or 2.03%, to $104.30 per barrel, while U.S. West Texas Intermediate crude futures gained $1.93, or 2.14%, to $92.25 per barrel. Both major benchmark crude contracts had fallen by more than 2% on Wednesday.
Iran's Foreign Minister stated on Wednesday that Iran is still reviewing a U.S. proposal to end the war but has no intention of negotiating to conclude the Middle East conflict. White House Press Secretary Caroline Levitt said that if Iran does not acknowledge it has been "militarily defeated," U.S. President Donald Trump will impose harsher measures on Iran.
Takeshi Ueno, Senior Economist at NLI Research Institute, commented, "Optimism about a ceasefire has faded." He added that the conditions set by the U.S. appear to be high, making oil prices susceptible to further volatility due to negotiations and military actions from both sides.
According to three Israeli cabinet sources familiar with the plan, the 15-point proposal delivered by Trump via Pakistan demands the removal of Iran's stockpile of highly enriched uranium, a halt to uranium enrichment activities, restrictions on its ballistic missile program, and an end to financial support for regional allies.
The conflict has nearly brought shipping through the Strait of Hormuz to a standstill. This strait typically handles about one-fifth of the world's crude oil and liquefied natural gas supplies. The International Energy Agency described this as the most severe oil supply disruption in history.
On Wednesday, Japanese Prime Minister Sanae Takaichi requested additional coordinated oil stock releases from International Energy Agency Executive Director Fatih Birol during talks, as Tokyo seeks to hedge against the risk of a prolonged Middle East conflict.
Adding to supply concerns, calculations based on market data indicate that at least 40% of Russia's oil export capacity has been idled following Ukrainian drone attacks, a disputed major pipeline incident, and the seizure of tankers.
Three Iraqi energy officials stated on Wednesday that Iraq's oil production has declined significantly, with storage tanks at high and critical levels. For the week ending March 20, U.S. crude inventories increased by 6.9 million barrels to 456.2 million barrels, the highest level since June 2024, far exceeding analysts' expectations of a 477,000-barrel increase in a Reuters poll.
