Brent crude climbed above $105 a barrel on Thursday, building on a 3.9% rally in the previous session as escalating tensions in the Middle East dimmed hopes for a diplomatic resolution to the conflict. Yahya Rahim Safavi, military adviser to Iran’s Supreme Leader, warned that the fighting could spread from the Persian Gulf, Strait of Hormuz, and Red Sea to the Indian Ocean if the US or Israel launched another attack. His comments undermined optimism over US-Iran contacts taking place on the sidelines of the UN General Assembly.
Iranian President Masoud Pezeshkian said Tehran was ready to resume talks aimed at ending the conflict but would not bow to threats. He also indicated that Iran would curb freedom of navigation through the Strait of Hormuz as long as US sanctions and a blockade remain in place. With Washington and Tehran still at odds over key issues affecting energy transit, oil markets stayed acutely sensitive to any further escalation.
