Oil prices moved higher after a sharp drop in the previous session, as markets reassessed the risk to energy supplies from the Middle East. The rebound of around 1% reflected continuing concern that the disruption to shipments linked to the US-Iran conflict has not been resolved.
Traders appear to be balancing two competing forces: the earlier selloff and the possibility that any diplomatic breakthrough could ease pressure on supply. But with talks to end the conflict still looking uncertain, the market remains sensitive to signs that oil flows from the region could stay under strain.
The latest price action shows how quickly crude can react to geopolitical developments. Even after a steep decline, worries about supply security in a key producing region were enough to support a recovery as investors weighed the chances of a near-term resolution.
For now, oil markets are likely to remain volatile as attention stays fixed on whether diplomacy can reduce tensions between the US and Iran. Until there is more clarity, concerns over disrupted shipments and broader Middle East supply risks are expected to keep influencing prices.
