Dubai – Oil prices declined during Thursday’s trading session, shedding part of the previous day’s gains amid growing optimism regarding the easing of geopolitical tensions. The reduction in fears concerning an escalation of the conflict in the Middle East led to a decrease in the risk premium in crude oil markets.
Simultaneously, increased production by OPEC+ and rising American stockpiles fueled worries about a supply surplus. Russian and Ukrainian negotiators agreed on a major prisoner exchange following two days of peace talks in Abu Dhabi that concluded on Wednesday.
Although American mediators stated that disagreements persist regarding other key issues, including land, the market reacted positively to the diplomatic progress. This development contributed to the downward pressure on crude benchmarks throughout the morning session.
Oil prices had ended Wednesday’s trading higher by more than one percent, driven by renewed fears of supply disruptions amid intensified targeting of tankers near the Strait of Hormuz. The shift in sentiment marked a significant change from the previous day’s volatility.
By 06:26 GMT, standard Brent crude futures for January 2027 delivery fell by 0.38 percent to reach $92.41 per barrel. Meanwhile, West Texas Intermediate crude futures for December 2026 delivery dropped by 0.39 percent to $86.19 per barrel, according to real-time figures tracked by the specialized energy platform based in Washington.
The two benchmark crudes rose during the previous session by 1.4 percent and 0.6 percent, respectively, recovering from their two-month lows recorded on Tuesday. This rebound was largely attributed to the immediate supply concerns that had gripped traders earlier in the week.
Hiroyuki Kikukawa, chief strategist at Nisay Securities Investment, noted that markets are declining due to expectations of behind-the-scenes efforts to secure a ceasefire between Russia and Ukraine. He added that it is unlikely the Iran war will escalate before the upcoming US-China summit next week.
Kikukawa emphasized that despite uncertainty surrounding the Strait of Hormuz, markets are unlikely to suffer a major collapse. He pointed out that the current price levels reflect a balance between geopolitical risks and fundamental supply data.
Ukrainian President Volodymyr Zelensky stated that Kyiv hopes to achieve tangible results in resolving the war this year. In contrast, Iranian Security Council Secretary Mohsen Rezaei declared that Iran will not allow even a single particle of enriched nuclear material to leave the country.
Rezaei warned of consequences if the United States launches new strikes. Washington stated that nuclear issues must be part of any preliminary negotiations with Iran aimed at ending the eight-month ongoing war. American officials downplayed the need for further military strikes.
Pessimism in oil markets was further heightened by increased crude oil production from OPEC+ in October. This increase was driven by higher Saudi output despite continued shipping disruptions through the Strait of Hormuz. Data from the American Petroleum Institute showed US crude inventories rose by nine million barrels last week.
Official data from the Energy Information Administration is scheduled for release today after a one-day delay due to a US national holiday on Wednesday. Traders await these figures to gauge the true extent of the supply glut affecting global prices.”
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This story was produced in the newsroom from the disclosed sources named above.
