US-Iran Diplomatic Stalemate Drives Oil Prices Higher

Oil prices rose more than 2% on Thursday as diplomatic talks between the US and Iran showed little sign of progress, while investors focused on uncertainty about a potential US ban on diesel exports.

Brent crude futures were up $2.32, or 2.25%, to $105.40 a barrel at 0803 GMT, while West Texas Intermediate futures were up $1.78, or 1.93%, to $93.94 a barrel.

A senior Iranian official told Reuters on Wednesday that Tehran was reviewing Washington's response to its peace proposals, which prioritize lifting a US naval blockade on Iranian ports and reopening the Strait of Hormuz.

The physical market for oil is nowhere near a fully normalized situation, said Priyanka Sachdeva, head of market insights at Phillip Nova. 'Brent retains a larger geopolitical and sea-route premium because international crude is more directly exposed to Middle East and Hormuz disruption,' she added.