Oil futures fluctuated throughout Thursday as traders monitored stalled negotiations between the U.S. and Iran over reopening the Strait of Hormuz. President Trump indicated talks have continued for five days, while market participants warned that prolonged uncertainty could tighten physical supplies ahead of peak summer demand.

Former Petronas trading head Baron Lamarre cautioned that without a deal within three months, the market faces potential disaster. He noted that while current supply remains manageable, rationing becomes likely when July and August demand surges. The geopolitical tension has created a supply crunch precisely as seasonal consumption typically rises.

WTI crude rose 1.7% to $93.76 a barrel while Brent gained 1.1% to $96.00, reversing earlier losses. Traders are laser-focused on ship traffic through the strait, with reduced vessel movements directly correlating to higher crude prices, according to Dennis Kissler of BOK Financial.

The market's volatility reflects genuine supply concerns rather than speculative trading. With global oil inventories described as critically low entering the summer travel season, each diplomatic delay carries immediate pricing consequences that extend beyond typical geopolitical risk premiums.