Oil prices moved higher on Wednesday, November 4, as uncertainty over US-Iran peace talks raised concerns about possible supply disruptions. Brent crude gained 0.74% to trade at USD 104.30 a barrel in the latest available market update.
Investors are closely watching diplomatic efforts between Washington and Tehran. Qatar's Foreign Ministry spokesperson said both sides were reviewing new proposals submitted by mediators. However, Iran's national security chief said the US response to those proposals was still unsatisfactory.
The developments have raised doubts over the chances of an immediate agreement.
The US carried out limited defensive strikes against Iranian surface-to-air missile systems earlier this week. Washington said the targets were linked to threats against American assets. The scale of the operations suggested that the US was not preparing for a wider military campaign.
Oil prices had fallen during the previous two sessions as hopes of diplomatic progress improved. On Tuesday, Brent crude settled USD 1.17 lower at USD 103.60 a barrel. US West Texas Intermediate (WTI) futures also dropped 37 cents to close at USD 96.09.
Earlier on Monday, crude prices had fallen more than 7% after Washington and Tehran indicated their willingness to negotiate. US President Donald Trump also expressed confidence that an agreement could be reached. Qatar has played an important role in the negotiations. Its Foreign Ministry confirmed that a delegation had travelled to Tehran to discuss ways to end the conflict.
However, Iran has maintained a firm position. Foreign Ministry spokesperson Esmaeil Baghaei said Tehran would not accept negotiations conducted through pressure or coercion, according to state news agency IRNA.
Shipping disruptions have added to market concerns. At least four attacks on commercial vessels have been reported in the Persian Gulf, Strait of Hormuz and Gulf of Oman since November began, according to the UK Maritime Trade Operations Centre.
The Strait of Hormuz is a major route for global oil shipments. Any prolonged disruption could restrict supplies and push crude prices higher. Higher oil prices are also increasing inflation concerns in the US. Rising fuel costs could add pressure on consumers and complicate the Federal Reserve's efforts to control inflation.
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