Overview
- Crude reversed roughly 3% gains from Wednesday after officials on both sides validated that talks will proceed on Friday in Oman.
- The earlier price spike followed a report that the talks were near collapse over location and format, with Iran pushing for a bilateral meeting and the U.S. initially rejecting a change.
- Substantive gaps remain over the scope of discussions, with Tehran seeking a nuclear-only agenda and Washington pressing to include missiles, regional proxies and human rights.
- Tensions persist after the U.S. military said it downed an Iranian drone and reported Iranian gunboats tried to board a U.S. merchant vessel in the Strait of Hormuz.
- Analysts expect headline-driven volatility to continue given the chokepoint’s importance and unresolved disputes, even as broader supply indicators and a stronger dollar have limited price rallies.