By: Economy Middle east

Oil prices held largely steady in early Thursday trading as optimism over a potential de-escalation in U.S.-Iran tensions offset concerns about continued supply disruptions. Investor optimism grew further following reports that Iran may permit vessel transit near the Strait of Hormuz.

As of 4:14 GMT,  Brent crude futures were up 0.01 percent at $94.94 per barrel, while U.S. West Texas Intermediate crude gained 38 cents, or 0.42 percent, to $91.67 per barrel. Both benchmarks had ended Wednesday’s session largely unchanged.

Investor hopes for U.S.-Iran deal grow

Oil prices remained unchanged as the White House signaled cautious optimism on Wednesday about the prospects of a deal to end the war with Iran, while warning that economic pressure on Tehran would intensify if it continues to resist. Despite these hopes, many investors remain doubtful, as previous rounds of U.S.-Iran negotiations have repeatedly collapsed after initial signs of progress.

The U.S.-Israeli conflict with Iran has caused an unprecedented disruption to global oil and gas supplies, largely due to Iran’s interference with traffic through the Strait of Hormuz, a critical passageway that accounts for roughly 20 percent of global oil and liquefied natural gas flows.

Meanwhile, U.S. and Iranian officials are considering resuming talks in Pakistan as early as this weekend, after negotiations concluded on Sunday without a breakthrough. In an effort to prevent further escalation, Pakistan’s army chief arrived in Tehran on Wednesday to mediate.

At the same time, the United States has imposed a maritime blockade on Iranian ports, with its military stating that seaborne trade to and from the country has been effectively brought to a standstill.

China’s strong economic growth boosts optimism over oil demand

U.S. Treasury Secretary Scott Bessent said on Wednesday that Washington will not extend the waivers that previously permitted limited purchases of Iranian and Russian oil without triggering U.S. sanctions.

At the same time, the U.S. Energy Information Administration reported that crude stockpiles declined by 913,000 barrels to 463.8 million barrels in the week ending April 10, defying analysts’ expectations for an increase of 154,000 barrels.

In China, the economy expanded more than anticipated in the first quarter of 2026, supported by robust export demand and a rebound in domestic consumption after a prolonged period of weakness.

Gross domestic product grew by 5 percent year-on-year, reaching the upper bound of Beijing’s annual target.

The stronger-than-expected reading boosted optimism over oil demand in the world’s largest crude importer, although several other indicators suggested that economic momentum weakened toward the end of the quarter. The outlook for China’s economy remains uncertain amid the ongoing Iran war, particularly given Beijing’s heavy reliance on crude imports from Tehran.