This week’s trading impetus – the perception that Iran was making a diplomatic effort with Middle East countries to achieve peace and end hostilities with the U.S. – was responsible on Thursday for yet another mild drop in oil prices, fortified by reports that U.S. vice president JD Vance sent a letter to Iranian Security Council chief Mohsen Rezaei to restart negotiations.
Brent fell roughly 0.38 percent to settle at $114.88 per barrel, and West Texas Intermediate fell about 0.76 percent to settle at $102 per barrel.
Giovanni Staunovo, analyst at UBS, said, "Oil prices are under pressure today amid renewed diplomatic efforts to de-escalate the conflict in the Middle East."
But the perception of what was going on in the Middle East seemed to depend very much on the political slant of the news outlets traders obtained their information from; for example, hawkish Fox News reported that Iranian parliament speaker Bagher Ghalibaf said any agreement to end the war would need acceptance of Tehran’s seven conditions.
Those conditions included lifting the U.S. blockade against Iran, withdrawal of U.S. forces, war damage compensation, release of frozen assets, and a halt to U.S. threats and insults – conditions Washington has already largely rejected.
Also, U.S. president Donald Trump said he did not direct Vance to initiate peace negotiations, but instead the vice president sent a letter to Iran regarding the provision of medical supplies.
One thing not in contention about the war was the escalation of attack in the Middle East, primarily from Iran-backed Houthis, although the hostilities were largely hit-and-miss.
On Thursday, a Saudi-led coalition fighting the Houthis said it had destroyed a ballistic missile fired by the group towards the kingdom's eastern region; and Iran's Revolutionary Guards said three tankers hit sea mines and caught fire while navigating an unauthorised route south of the Strait of Hormuz over the past 24 hours.
In other war-related oil news on Thursday, an analysis by Euronews Business showed that the European Union has been paying $11 billion more to import oil since the hostilities choked crude supplies: between April and July, the EU spent an average of $30.7 billion per month on petroleum oil imports, up from $19.7 billion in the same period in 2025.
Also on Thursday, French economy minister Roland Lescure said Europe will release 42 million barrels of emergency oil stocks over the next three months, half of it diesel, in an attempt to reduce prices before winter.
European policymakers are also reportedly reconsidering their refinery strategy, which for the past 20 years largely consisted of closing refineries.
