Oil steadied higher as traders weighed US discussions with Iran over a new peace proposal, while the Strait of Hormuz remained largely closed. Market participants noted that the region’s supply uncertainty keeps prices volatile, and the U.S. diplomatic engagement may signal a shift in the broader geopolitical risk premium.

The Gulf of Oman’s blockage has already pushed Brent crude up by roughly 10% in the past week, and investors fear a continued halt could trigger a sharper rally. Analysts warn that any escalation would widen the spread between West and East Asia fuel costs, hurting shipping and energy‑heavy industries.

U.S. officials are reportedly reviewing Tehran’s offer, which could include phased sanctions relief in exchange for a cessation of hostile actions. The proposal’s viability hinges on the political calculus in Washington and the reaction of allies concerned about regional stability.

For investors, the unfolding talks add a layer of uncertainty that could prompt a rebalancing of exposure to Middle East oil producers and transport assets. Firms with tight supply chains may adjust hedging strategies to mitigate the risk of a sudden price spike.