Brent crude held near $100 per barrel on Thursday after a historic two-day selloff stripped away much of this week’s conflict-driven rally, as traders balanced growing optimism over a possible U.S.-Iran peace framework against uncertainty about whether any formal agreement will follow.
Brent traded around $100.19 per barrel, down 1.07 percent from the previous session, after plunging more than 7.8 percent on Wednesday when it settled at $101.27, having briefly dropped below $100 for the first time since April 22.
The sharp decline followed reports that Washington transmitted a one-page memorandum of understanding to Tehran through Pakistani intermediaries, aimed at formally ending hostilities and enabling a phased reopening of the Strait of Hormuz. The critical shipping corridor handles roughly a fifth of global oil flows. Iran confirmed it was reviewing the proposal and is expected to respond within days, with broader nuclear-related negotiations anticipated to follow.
President Donald Trump signalled progress on the diplomatic front while cautioning that assuming Iranian acceptance would be premature, and warned that military strikes could resume if talks collapse.
The latest price movement marks a dramatic reversal from earlier conflict highs, when Brent surged above $114 per barrel on fears of prolonged Strait disruption. Despite the recent retreat, Brent remains 5.74 percent higher over the past month and 59.44 percent above year-ago levels, illustrating how deeply the Middle East conflict has reshaped global energy markets even as diplomacy gains traction.
Physical market pressures remain elevated despite falling futures. Strait disruptions have already triggered significant supply dislocations across Asia, where refined fuel exports have plunged and buyers have increasingly turned to American crude, pushing U.S. oil exports to record highs. Analysts warn that even a successful peace agreement may take weeks or months to translate into normalised shipping and supply chains rather than an immediate restoration of flows.
Markets are now navigating two competing realities: diplomatic optimism pulling prices lower and the practical challenge that restoring crude and refined product flows through the region will be a slow process. That tension is expected to keep Brent volatile near current levels as investors assess whether diplomacy can deliver actual supply normalisation.
