Oil prices climbed on Thursday as signs emerged that U.S.-Iran negotiations are losing momentum. ANZ Research notes media reports that Hezbollah refuses any partial ceasefire with Israel, a stance Tehran has cited as essential for a wider peace deal. Traders interpreted the impasse as a risk to regional stability.

Iranian officials have warned that without a comprehensive ceasefire, their proxy militias could target oil shipments in the Red Sea. Analysts stress that such disruption would bite the market hard, since Saudi Arabia currently moves roughly 5 million barrels a day through that corridor. A supply shock would tighten global inventories and support higher prices.

WTI crude futures for the front month rose 1.8% to $95.46 a barrel, reflecting worries that any Red Sea attacks could curtail Saudi output. The price jump underscores how quickly geopolitical friction translates into market moves, leaving investors to monitor diplomatic chatter for the next supply shock trigger.

Energy traders will watch the United Nations and regional powers for any diplomatic overtures that could ease tensions. Meanwhile, refiners may adjust crack spreads as higher crude prices erode margins, while airlines and logistics firms brace for potential freight cost spikes. The market remains sensitive to any indication of renewed hostilities.