Oil prices ticked up in early Wednesday trade, with Brent front-month futures extending a record March rally as Middle East volatility kept markets jittery, despite reports that the U.S. and Iran may be edging closer to a negotiated end to the war.
The front-month Brent contract for June delivery rose 66 cents or 0.63% to $104.63 per barrel by 0010 GMT. Front-month Brent futures hit a record monthly gain of 64% in March, according to LSEG data dating back to June 1988.
U.S. West Texas Intermediate (WTI) crude futures for May rose 96 cents or 0.95% to $102.34 per barrel while WTI futures for June rose 46 cents or 0.49% to $93.62 per barrel.
“Even with diplomatic channels reportedly still active and intermittent comments from the U.S. administration predicting a short end to the conflict, the combination of limited tangible diplomatic progress, continued maritime attacks, and explicit threats against energy assets keeps supply risks skewed to the upside,” LSEG analysts said in a note.
Prices recovered some of their daily losses from Tuesday, when Brent futures for June delivery settled down more than $3 after unconfirmed media reports that Iran’s president was ready to end the war.
President Donald Trump also told reporters on Tuesday that the U.S. could end the military campaign within two to three weeks and that Iran doesn’t have to make a deal to end the conflict, his clearest declaration yet that he wants to wind down the month-long war.
Still, even if the conflict ends, infrastructure damage is likely to keep supplies tight, analysts say.
Trump has also indicated he could end the war before reopening the Strait of Hormuz, a key route through which 20% of global oil and LNG trade flows, according to a Wall Street Journal report.
Oil output by Organization of the Petroleum Exporting Countries (OPEC) dropped 7.3 million barrels per day in March compared to the previous month, a Reuters survey showed on Tuesday, illustrating the impact of forced export cuts because of the closure of Hormuz.
The strait’s blockage and output disruptions have led analysts to increase their annual oil price forecast by a record amount from February to March, according to a Reuters poll of economists and analysts.
The survey conducted in March predicts Brent crude will average $82.85 per barrel in 2026, about 30% higher than February’s forecast of $63.85, which was polled before the war began.
The $19 increase represents the steepest annual forecasts in Reuters’ monthly oil poll data, which dates back to 2005.