Key Points
- Brent crude plunged 7.83% on Wednesday before edging slightly higher on Thursday
- WTI crude lost more than 7% amid hopes of a possible US-Iran understanding
- Traders remain cautious over shipping risks in the Strait of Hormuz
ISLAMABAD: Global oil prices rebounded modestly on Thursday after suffering their steepest daily decline in weeks.
Terming it a technical correction, Traders assessed the prospects of a possible de-escalation between the United States and Iran, following intense volatility over the Strait of Hormuz uncertainty.
Brent crude futures rose around 0.8 per cent to about $102 per barrel in early Thursday trade after collapsing 7.83 per cent a day earlier to settle at $101.27 a barrel. By midday, it again fell to $100.9.
US West Texas Intermediate (WTI) crude also recovered nearly 0.8 per cent to around $95.84 per barrel after falling 7.03 per cent on Wednesday to settle at $95.08, according to the market data.
The sharp decline came after reports suggested Washington and Tehran were nearing an initial peace framework that could reduce immediate fears of prolonged disruption to Gulf oil shipments.
Brent had briefly dropped below the psychologically important $100-per-barrel mark for the first time since April 22 before recovering part of its losses.
Despite Thursday’s rebound, oil markets remain highly sensitive to developments around the Strait of Hormuz, the narrow waterway through which roughly one-fifth of global oil supplies pass.
Analysts said traders were attempting to balance hopes for diplomacy against the continuing risk of renewed confrontation or shipping disruptions in the Gulf region.
The latest downturn followed weeks of extraordinary volatility in global energy markets.
Brent crude had surged above $126 per barrel late last month, reaching a four-year high amid fears of a wider regional conflict and threats to tanker traffic through the Strait.
Oil prices have repeatedly swung sharply in recent months as markets reacted to military escalations, ceasefire announcements, and conflicting diplomatic signals involving Iran, the United States, and regional actors.
Earlier this year, both Brent and WTI recorded some of their biggest weekly gains since the early stages of the Russia-Ukraine war, with crude briefly approaching $120 per barrel amid fears of supply shortages.
Even with the latest selloff, underlying supply concerns persist.
Refined fuel exports from Asia have plunged because of ongoing disruptions around Hormuz, tightening diesel, gasoline, and jet fuel supplies across major markets.
Analysts also warned that any breakdown in diplomatic efforts or fresh attacks on shipping infrastructure could rapidly push prices higher again.
Market participants continue to monitor tanker movements, US crude inventories, and statements from Tehran and Washington for signs of the future direction for both the conflict and energy flows.
