Oil Prices Rise Amid US-Iran Tensions and Supply Disruption Fears

Oil futures edged higher on Thursday as geopolitical tensions in the Middle East fueled investor concerns over potential supply disruptions. Brent crude futures rose by 21 cents, or 0.3%, to $71.06 per barrel, while West Texas Intermediate (WTI) futures increased by 16 cents, or 0.2%, to $65.58.

The market's focus remains firmly on the escalating situation between the United States and Iran. This follows a recent military buildup by Washington in the region, aimed at increasing pressure on Tehran over its nuclear and missile programs. Earlier in the week, Brent had reached its highest level since late July.

Analysts are closely watching whether diplomatic efforts can prevent a military confrontation. "Market participants are focused on whether a military clash can be avoided through U.S.-Iran talks," said Toshitaka Tazawa, an analyst at Fujitomi Securities.

Tazawa outlined potential scenarios for price movements. He suggested that even if hostilities begin, a limited and short-lived conflict could push WTI prices temporarily above $70 per barrel before settling back into a range of $60-$65. However, a prolonged conflict poses a more significant risk, potentially disrupting exports from Iran—OPEC's third-largest producer—and other key Middle Eastern suppliers.

A new round of diplomatic talks is scheduled for Thursday in Geneva. U.S. Special Representative Stephen Witkopf and senior advisor Jared Kushner are set to meet with an Iranian delegation for a third round of discussions.