Oil prices rise amid uncertainty over Iran peace talks

Oil prices extended gain on Thursday, May 21, 2026, as investors monitored peace talks between the United States and Iran in the ongoing Middle East war.

Brent crude futures rose $1.27, or 1.21%, to $106.29 a barrel by 0618 GMT, while U.S. West Texas Intermediate futures were up $1.29 cents, or 1.31%, at $99.55.

Both benchmarks dropped more than 5.6% on Wednesday to their lowest in more than a week after United States President Donald Trump said talks with Iran were in the final stages, but also threatened further attacks if Tehran did not agree to a peace deal.

“The oil ⁠market remains overly sensitive to Iran-related headlines, with participants continuing to pin considerable hope on reports that talks between the U.S. and Iran are progressing,” ING analysts said in a note on Thursday.

“We’ve been in this situation multiple times before, which ultimately led to disappointment,” they added, forecasting an average Brent price of $104 a barrel in the current quarter.

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Iran warned against further attacks and unveiled steps to entrench its control of the crucial Strait of Hormuz, mostly closed, though before the war, it had carried oil and liquefied natural gas shipments equal to about 20% of global consumption, Reuters reported.

On Wednesday, Iran announced a new “Persian Gulf Strait Authority,” saying there would be a “controlled maritime zone” in the Strait of Hormuz.

Iran effectively closed ⁠the strait in response to the U.S. and Israeli attacks that started the war on February 28. Most of the fighting has stopped since an April ceasefire, but while Iran is limiting traffic through Hormuz, the U.S. has blockaded its coastline.

Supply losses from the key Middle Eastern producing region because of the war have forced countries to pull from their commercial and strategic inventories ⁠at a rapid rate, raising concerns about draining them.