Oil rose again in early Thursday trading as the market partially reversed Wednesday's ceasefire relief move. Reuters reported that Iran is still reviewing a U.S. proposal to end the war but has no intention of holding direct talks, while AP and CNBC both described a harder public line from Tehran. Reuters also said at least 40% of Russia's oil export capacity is halted after drone attacks, pipeline damage, and tanker disruptions. For traders, that means the supply-risk backdrop is still live even after the earlier relief bounce.

TL;DR

  • Reuters said Brent rose to $103.87 and WTI to $91.81 as traders reassessed whether Middle East de-escalation is actually close.
  • AP and CNBC both reported that Iran rejected direct talks with Washington even while reviewing the broader U.S. proposal.
  • Reuters separately calculated that at least 40% of Russia's oil export capacity is halted, adding a second supply-side stress point.
  • Asian stocks were mixed and the dollar held firm, suggesting markets have moved back from relief mode to cautious, headline-driven positioning.

What happened

The key shift since the last qualifying ChartDojo post is that the market stopped treating the ceasefire proposal as a clean off-ramp. Reuters reported that Iran is reviewing the U.S. proposal delivered through mediators, but Foreign Minister Abbas Araqchi said Tehran has no intention of holding talks with Washington to wind down the conflict. AP's reporting pointed in the same direction, saying Iran dismissed the U.S. pause plan and continued attacks across the region. CNBC then tied that harder political tone directly to the tape, reporting that oil prices rose as Iran rejected direct U.S. talks despite the proposal remaining under review.

That matters because Wednesday's relief trade was built on the idea that diplomacy might remove some of the war premium from crude. ChartDojo covered that move in the earlier post on oil falling below $100, after first tracking the initial peace-plan headline in the U.S.-Iran peace-plan risk watch. Thursday's move is the follow-up: diplomacy remains possible, but the market no longer trusts the headline by itself.

Reuters added a second reason for caution. Its calculations showed that at least 40% of Russia's oil export capacity is halted following Ukrainian drone attacks, pipeline damage, and tanker seizures. Even if Iran-related tensions cool somewhat, a tighter Russian export picture can keep crude markets firmer than Wednesday's relief move implied.

Why markets moved after oil rose on Iran talk rejection

Oil is still the main transmission channel from this conflict into the rest of the market. When crude rises, traders have to price a tougher inflation path, less room for central banks to ease, and more pressure on transport, industrial, and consumer-sensitive sectors. That pressure does not stay inside energy futures. It spreads into equity leadership, rate expectations, and the dollar.

Reuters' Asia market coverage showed that shift clearly. Stocks struggled for direction instead of extending Wednesday's relief rally, and the dollar held near recent highs as investors looked for safety. Reuters' FX coverage also said traders moved toward expecting the Fed to stay on hold through year-end. That is not a full panic signal, but it does show the market has gone back to treating the conflict as a live macro and inflation risk rather than a fading headline shock.

Implications for the most impacted trader cohorts

Oil and futures traders: Brent above $103 and WTI near $92 mean the market can quickly rebuild premium if diplomacy stalls, if Hormuz access remains constrained, or if Russian export losses deepen.

Equity traders: The broad-equity relief trade looks less secure than it did late Wednesday. A mixed Asia session is not full liquidation, but it is a clear step down from a clean de-escalation narrative.

FX and macro traders: The dollar's resilience is an important tell. If the greenback stays supported while oil rises, markets are still treating the conflict as an active inflation and risk event.

Potential positives vs negatives

  • Potential positives: Iran is still reviewing the proposal, so the diplomatic channel has not fully collapsed.
  • Potential positives: Equities are mixed rather than in full liquidation, which suggests traders still see a path to eventual de-escalation.
  • Potential negatives: Iran's public rejection of direct talks weakens the clean ceasefire narrative that drove Wednesday's relief move.
  • Potential negatives: Reuters' Russia export-capacity estimate adds a second major supply risk beyond Hormuz.

What could happen from here

Base case: The market keeps swinging between partial optimism and fresh supply fear. In that setup, oil stays volatile but structurally firm, stocks remain headline-sensitive, and traders continue to price a policy backdrop with less room for rate cuts.

Upside case: Tehran's review turns into a concrete negotiating process. If that happens, crude could give back part of Thursday's bounce, equities could recover their footing, and the dollar could soften as inflation anxiety cools.

Downside case: Russian export disruptions deepen further or the Strait of Hormuz situation worsens again. In that scenario, Brent could retest recent highs quickly and drag broader risk assets into a much clearer risk-off move.

What to watch next

  • Any sign that Iran's review turns into formal negotiations instead of continued public rejection plus indirect messaging.
  • Whether Brent can hold above the $103 area and whether WTI can sustain trade near or above $92.
  • Whether Europe and the U.S. sessions confirm the mixed Asia tone or recover back into relief mode.
  • Dollar strength and rate-pricing changes as traders weigh a hold-through-year Fed path.
  • Follow-through on Reuters' report that Russian export capacity losses are approaching 40%.

Sources

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