Oil prices continued to seek direction on Thursday despite reports of progress in US-Iran talks, which had pushed prices up nearly 5% on Wednesday amid geopolitical concerns and news of military buildups in the Middle East.
International benchmark Brent crude traded at $69.97 per barrel at 9.28 a.m. local time (0628 GMT), down 0.07% from the previous close of $70.02.
US benchmark West Texas Intermediate (WTI) decreased 0.06% to $65.19 per barrel, compared with $65.23 in the previous session.
The US and Iran completed a second round of negotiations, first in Muscat, Oman, and then in Geneva, to resume the diplomatic process following attacks on Iran in June 2025 and a 12-day conflict. The talks reportedly reached agreement on some issues, with discussions set to continue in the coming days.
However, the US continues an unprecedented military buildup in Europe and the Middle East, deploying large numbers of warplanes and related assets to its bases in preparation for a potential strike if Iran fails to respond to demands regarding its nuclear program.
Experts highlight that the main concern for oil markets is the potential disruption of shipping through the Strait of Hormuz, which handles roughly one-third of global seaborne oil exports, if tensions escalate.
Divided Federal Reserve (Fed) members said at their January meeting that additional interest rate cuts should be postponed for now but could be considered later in the year if inflation slows, according to minutes released on Wednesday.
The minutes underscored ongoing uncertainties regarding inflation, the growth outlook, and the labor market. Some officials noted that if overall price growth slows as expected, further downward adjustments to the policy rate could be warranted.
Other officials argued that maintaining the policy rate unchanged for a period while assessing incoming data would be appropriate. The minutes also indicated that some policymakers viewed upward adjustments to the policy rate as suitable if inflation remained above target, supporting a "two-way" approach in the Federal Open Market Committee's guidance for future rate decisions.
While the decision to maintain the central bank's benchmark rate was broadly approved, the path forward appeared less certain, with members divided between curbing inflation and supporting the labor market.
The Fed's stance is likely to moderately lift oil prices, as potential future rate cuts could stimulate demand, while the "two-way" policy approach adds uncertainty that may boost short-term trading. This effect is partly offset by the risk that persistent inflation could trigger rate hikes, weighing on growth and oil demand.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
