Oil settles up nearly 6% as investors fear further Middle East escalation
Published Fri, Mar 27, 2026 · 06:01 AM
[NEW YORK] Crude futures closed higher on Thursday, rebounding from the previous session’s losses, as hopes for a swift end to the war in the Middle East faded.
Brent futures rose US$5.79 or 5.7 per cent to settle at US$108.01 per barrel on Thursday, while the US West Texas Intermediate crude futures gained US$4.16, or 4.6 per cent to close at US$94.48 a barrel.
Trading volume for the front-month Brent contract was the lowest since Feb 27, the day before the United States and Israel began strikes on Iran.
US Special Envoy Steve Witkoff confirmed that the United States sent a “15-point action list” to Iran as a basis for negotiations to end the war. Iranian Foreign Minister Abbas Araqchi said earlier that Iran was reviewing the US proposal but that there were no talks on winding down the war.
A senior Iranian official told Reuters on Thursday that the proposal was “one-sided and unfair,” even as US President Donald Trump said Iran has offered to let 10 oil tankers transit the Strait of Hormuz as a goodwill gesture in the negotiations.
“There’s purely confusion and frustration over the veracity of stories coming out of the United States and Iran. Investors are once again rotating into safer assets in an effort to preserve capital,” said Timothy Snyder, chief economist at Matador Economics.
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The Pentagon is planning to send thousands of airborne troops to the Gulf to give Trump more options for a ground assault, sources have told Reuters, adding to two Marine contingents already en route.
On the Iranian side, Yemen’s Iran-aligned Houthi movement said it stands ready to strike the key Red Sea waterway again in solidarity with Iran, a Houthi leader told Reuters.
“Ongoing military escalation, including troop deployments and fresh strikes, alongside limited tanker movement under strict Iranian conditions, continues to strain global energy markets,” MUFG analyst Soojin Kim said.
The war has nearly halted shipments through the Strait of Hormuz, which typically carries about a fifth of the world’s crude oil and LNG supply, in what the International Energy Agency has called the biggest oil supply disruption ever.
Brent futures are up nearly 50 per cent, while WTI is up 41 per cent since the war began, even after both contracts slumped more than 2 per cent on Wednesday.
Trump’s 15-point plan
The 15-point US proposal, sent through Pakistan, would remove Iran’s stocks of highly enriched uranium, halt enrichment, curb its ballistic missile programme and cut funding for regional allies, three Israeli cabinet sources familiar with the plan said.
A senior Iranian official said the proposal lacks the minimum requirements for success and serves only US and Israeli interests, but stressed that diplomacy has not ended despite the lack for now of a realistic peace plan.
In the meantime, Iraq’s oil production has slumped, with storage tanks reaching high and critical levels, three Iraqi energy officials said on Wednesday. Iraq was the second-biggest crude producer in Opec behind Saudi Arabia in 2025, according to US Energy Information Administration data.
Reuters calculations based on market data also show that at least 40 per cent of Russia’s oil export capacity is halted following Ukrainian drone attacks and the seizure of tankers.
Russia’s Kirishinefteorgsintez oil refinery, one of the largest in the country, halted processing on Thursday following Ukrainian drone attacks that caused fires in some parts of the plant, two industry sources said.
But in signs that crude flows were opening up, a Thai oil tanker passed through the Strait of Hormuz following diplomatic coordination with Iran, and Malaysia said its vessels were also being allowed to transit.
The Iranian embassy in Spain also said on Thursday that Iran would be receptive to any request from Madrid related to the Strait of Hormuz because Spain respects international law, in what is the first such concession offered to an EU state.
France said its military chief held talks with around 35 countries on Thursday as it sought partners and proposals for a mission to reopen the Strait of Hormuz once the war ends. REUTERS
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