Oil prices jump after Reuters report signals complication to US-Iran peace talks

LONDON - Oil prices jumped on Thursday after Reuters reported that Iran's Supreme Leader has issued a directive that the country's near-weapons-grade uranium should not be sent abroad.

The report, which cited two senior Iranian sources, signalled that Tehran is hardening its stance on one of the main U.S. demands. Ayatollah Mojtaba Khamenei's order could further frustrate U.S. President Donald Trump and complicate talks on ending the U.S.-Israeli war on Iran.

Brent crude futures gained $3.51, or 3.3%, to $108.53 a barrel by 1330 GMT, and U.S. West Texas Intermediate futures rose $3.67, or 3.7%, to $101.93. Both were trading lower before the report.

Benchmarks dropped around 5.6% on Wednesday to their lowest in more than a week after Trump said talks with Iran were in the final stages.

Pakistan stepped up diplomatic efforts on Thursday to hasten the peace talks between the U.S. and Iran, as Tehran said it was reviewing Washington's latest responses. Trump suggested he could wait a few days for "the right answers" from Tehran but was also willing to resume attacks on the country.

"We've been in this situation multiple times before, which ultimately led to disappointment," ING analysts said in a note on Thursday, forecasting an average Brent price of $104 a barrel in the current quarter.

Iran warned against further attacks and unveiled steps entrenching its control of the Strait of Hormuz, which remains mostly closed. Before the war the strait carried oil and liquefied natural gas shipments equal to about 20% of global consumption.

Economic activity in the euro zone shrank at its sharpest rate in more than 2-1/2 years in May as a war-driven surge in living costs hammered demand for services across Europe and firms accelerated layoffs, surveys showed on Thursday.

DRAWDOWNS IN STOCKPILES

The start of peak summer fuel demand combined with the lack of new oil exports from the Middle East and depleting stocks could push the oil market into the "red zone" in July-August, International Energy Agency head Fatih Birol said on Thursday.

Even if the Middle East conflict ended now, full oil flows through the Strait of Hormuz will not return before the first or second quarter of 2027, ADNOC CEO Sultan Al Jaber said.

On Wednesday, Iran announced a new "Persian Gulf Strait Authority", saying there would be a "controlled maritime zone" in the Strait of Hormuz.

Iran effectively closed the strait in response to the U.S. and Israeli attacks that started the war on February 28. Most of the fighting has stopped since an April ceasefire, but while Iran is limiting traffic through Hormuz, the U.S. has blockaded its coastline.

Supply losses from the key Middle Eastern producing region because of the war have forced countries to tap their commercial and strategic inventories at a rapid rate, raising concerns about draining them.

The U.S. Energy Information Administration said on Wednesday the country withdrew nearly 10 million barrels of oil from its Strategic Petroleum Reserve last week for its biggest drawdown on record. U.S. crude inventories also fell by more than expected last week, according to EIA data.

(Reporting by Stephanie Kelly in London, Sam Li in Beijing and Siyi Liu in Singapore; Editing by Gus Trompiz, Kirsten Donovan)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published May 21, 2026 at 6:47 AM.