Brent crude futures closed higher on Thursday, gaining $3.67 - a 3.88% rise - to settle at $98.29 a barrel, while U.S. West Texas Intermediate (WTI) finished up $2.40, or 2.72%, at $90.52 a barrel. The uptick reversed a dramatic fall on Wednesday when both benchmarks plunged by more than 8% to their lowest settlement levels since August 31.
Market participants said the rebound reflected caution about an overly rapid repricing of a return to normal oil flows before diplomatic progress translated into reliable shipping and deliveries. "Today’s rebound reflects caution about pricing in a rapid normalization of oil flows before diplomatic progress translates into dependable shipping and deliveries," Gelber and Associates said in a note on Thursday.
Safety concerns for shipping remained front of mind. Andy Lipow, president of Lipow Oil Associates, noted that reports of tankers striking mines or being targeted by drones in the Middle East continued to weigh on market sentiment. According to the UK maritime security agency UKMTO, attacks on vessels in the Gulf have remained near record levels, with at least five vessels reporting incidents since Sunday. That pace was similar to October, when the agency recorded 35 vessels hit - the most in any month of the war.
Political developments also factored into market calculations. The article states that the war with Iran, which US President Donald Trump launched along with Israel in February, contributed to sharply higher fuel prices earlier in the conflict, a dynamic that had political ramifications for voters. In Tuesday’s midterm elections, Democrats gained control of both houses of Congress, routing the Republican Party. The new Democratic-controlled Congress is set to take office in January.
With the midterms concluded, Citi said in a note there were concerns the White House might rely more on executive powers in foreign policy and potentially escalate the war with Iran. At the same time, Eurasia Group adjusted its probabilities around possible next steps: it lowered its estimate for the chance of renewed U.S. strikes on Iran to 60% from 65%, cut the probability of a diplomatic deal to 10% from 20% because Iran has maintained firm demands, and increased the likelihood of a prolonged standoff to 30% from 15%.
Eurasia Group also warned that, despite the recent fall in prices, any escalation in the conflict could push Brent into a $110 to $125 per barrel range.
Diplomatic activity continued amid the tensions. Iran’s foreign ministry said Foreign Minister Abbas Araqchi spoke with his Saudi and Qatari counterparts about "the latest progress" in efforts to promote regional stability. At the same time, Saudi Arabia, the world’s largest oil exporter, issued alerts warning of potential danger in Yanbu, its Red Sea oil export hub, as Yemen’s Iran-aligned Houthi forces continued attacks on the kingdom in another front of the conflict. The Houthis later claimed they attacked King Fahd airport in Dammam; there was no immediate confirmation from Saudi authorities.
Iran’s Islamic Revolutionary Guard Corps reported two oil tankers and a tugboat caught fire in separate incidents after taking unauthorised routes through the Strait of Hormuz, adding to the tally of maritime disruptions.
Beyond the Middle East, attacks elsewhere raised additional supply concerns. Ukraine renewed strikes on Russian oil refineries, potentially complicating Russia’s ability to export diesel under a deal tied to the Trump administration. A large overnight drone attack appeared to have struck the Ryazan oil refinery, one of Russia’s largest, in an incident southeast of Moscow, according to a Reuters video analysis cited in the original reporting. If confirmed, it would be the second Russian refinery hit this week, following an attack on the Yaroslavl plant on Monday night.
Market participants therefore remain caught between immediate operational risks to shipping and refining and evolving political signals that could alter the conflict’s course. The rebound in prices on Thursday highlights that even after a steep midweek sell-off, traders are unwilling to fully discount the prospect of renewed supply disruptions or of geopolitical escalation that could tighten markets again.
Contextual note: The article presents a mix of market moves, maritime security reports and political assessments as reported. It reflects the positions, probabilities and claims made by the entities cited, including Gelber and Associates, Lipow Oil Associates, UKMTO, Citi and Eurasia Group, as well as statements from the Iranian foreign ministry and the Islamic Revolutionary Guard Corps. Some reported claims, such as the account of who initiated the war and the political attributions to specific leaders, are presented as they were reported in the source material.