Oil prices extended their recent advance as market participants digested fresh signs that supplies from the Middle East are likely to stay constrained for some time because negotiations to end the U.S.-Israeli war against Iran have reached a deadlock. The prospect of prolonged disruptions underpinned gains in both Brent and U.S. West Texas Intermediate futures.
June Brent crude rose $1.91, or 1.62%, to $119.94 a barrel as of 0057 GMT, following a 6.1% jump in the previous session. The June contract, which has increased for a ninth consecutive day, is due to expire on Thursday. The more actively traded July Brent contract was at $111.38, up 94 cents, or 0.85%, after a 5.8% gain in the prior session.
U.S. West Texas Intermediate (WTI) futures for June gained 63 cents, or 0.59%, to $107.51 a barrel, after surging 7% in the previous session. WTI has advanced in eight of the last nine sessions, reflecting investor focus on tightening supply expectations.
Market tensions were heightened after the U.S. president spoke with oil companies about potential measures to limit the impact of a possible months-long U.S. blockade of Iran's ports, a White House official said. That outreach reinforced market concerns that a blockade could extend the disruption of Iranian exports and further tighten global oil availability.
"Prospects for any near-term resolution to the Iran conflict or a reopening of the Strait of Hormuz remain dim," said IG market analyst Tony Sycamore.
The outreach to oil producers followed a stalemate in efforts to end a conflict that has killed thousands and produced what some analysts describe as the largest disruption to energy flows in recent memory. Tehran has substantially restricted shipping transits through the Strait of Hormuz, permitting largely only its own vessels to pass from the Gulf, after U.S. and Israeli air strikes on Iran began on February 28. In addition, the United States initiated a blockade of Iranian ships this month.
On the supply-management front, the OPEC+ grouping of OPEC members and allied producers is expected to approve a modest rise in official output quotas - roughly 188,000 barrels per day - at a meeting on Sunday, according to sources. That small increase comes as the United Arab Emirates prepares to withdraw from OPEC, effective May 1, a step that market participants expect will weaken the producer group's collective control over pricing.
Analysts note that although the UAE's exit could enable it to boost production once exports resume, the move is unlikely to materially change market fundamentals this year. The closure of the Strait of Hormuz and other war-linked production interruptions remain dominant factors keeping supply tight. Wood Mackenzie analysts wrote that Gulf producers, including the UAE, will need months to return to pre-war production volumes.
Price action this week reflects a market increasingly focused on logistics and geopolitical chokepoints as much as on headline OPEC+ quota decisions. With key transit routes curtailed and blockades in place, even modest increases in output quotas may struggle to alleviate near-term shortages or ease the pressure on benchmark prices.
Investors and energy market participants will be watching both the OPEC+ meeting and any further operational developments around the Strait of Hormuz and U.S.-led maritime enforcement activities for signals on how long constrained flows might persist.