Brent futures rose above $107/bbl on Thursday, Sept. 24, with US West Texas Intermediate climbing to $96.50/bbl, as hopes for a near-term breakthrough in US-Iran negotiations faded and traders priced a longer disruption at the Strait of Hormuz.

The gains extended Wednesday's rebound and erased the week's earlier weakness, which had followed signs of improving Middle East supply — most notably Saudi Arabia's restart of the East-West Pipeline.

Talks deadlocked on blockade, Hormuz

Iran and the US remain divided over terms for ending the conflict. Tehran is prioritizing an end to the US naval blockade on Iranian ports and the reopening of the Strait of Hormuz. A senior Iranian official said both issues came up in indirect talks on Tuesday, but there was little sign of an imminent agreement.

Rhetoric hardened at the UN General Assembly in parallel. US President Donald Trump used his address on Tuesday to threaten to "annihilate" Iran if no deal is reached. Iranian President Masoud Pezeshkian responded on Wednesday, saying Iran would not surrender to US pressure and calling Trump's remarks a sign of a "bullying mentality." Pezeshkian also said Tehran remained open to negotiations — though not under what he called the language of force.

Tehran has signaled that a negotiated reopening of Hormuz remains possible. A senior Iranian official said the strait could reopen within 7 days if Washington takes steps toward lifting the blockade. That keeps diplomacy relevant for the oil market. The public positions of the two governments, however, have shifted little.

The premium in the price

The result is a market still carrying a sizable geopolitical premium in Brent, according to traders and market commentary. Traders are weighing the possibility of an eventual diplomatic settlement against the risk that restricted Hormuz traffic and broader regional hostilities persist for longer than expected.

For refiners, that premium translates directly into crude acquisition cost with no corresponding product-price certainty, and any negotiated reopening of the strait — the 7-day timeline cited by the Iranian official — represents the single largest downside catalyst for prompt barrels.

Saudi East-West line back online

On the physical supply side, Saudi Arabia restarted the East-West Pipeline this week after a Sept. 11 drone attack forced it offline. The line moves crude to the Red Sea port of Yanbu, bypassing Hormuz entirely, and has capacity of about 7 million b/d. Full restoration is expected to take 6-8 weeks.

Before the shutdown the pipeline was carrying around 4 million b/d — roughly 4% of global oil supply. The restart briefly pushed Brent below $100/bbl earlier this week as traders reassessed the scale of the physical disruption, before diplomatic pessimism pulled prices back up.

Watch items

Three variables now frame the near-term price path: the pace of the East-West Pipeline's ramp toward its 7-million-b/d nameplate across the next 6-8 weeks; any tangible US move toward lifting the naval blockade, which Tehran has tied to a 7-day Hormuz reopening; and the substance, if any, behind the next round of indirect talks after Tuesday's session produced no visible progress.