Crude prices gained on Thursday after falling earlier in the session as markets weighed advancing Strait of Hormuz negotiations between Iran and Oman, and lingering maritime security threats.
Brent gained more than 1% to $88.81 per barrel, while West Texas Intermediate crude futures added 0.5% to $82.61/bbl.
"The Strait of Hormuz story moved another step toward resolution. Iran and Oman agreed terms for sharing the waters and the revenues of the strait, though Tehran said reopening the waterway requires more than this deal," Saxo Bank analysts said.
Iran and Qatar met on Thursday to discuss establishing a temporary joint shipping corridor and creating conditions for de-escalation.
Analytics firm Kpler noted that traffic dropped to just five vessels on August 25 while the UK Maritime Trade Operations reported that a tanker was struck by an unknown projectile, triggering a localized fire that has since been contained.
On the supply front, the Energy Information Administration reported a build of 100,000 barrels in US commercial crude inventories for the week ending August 21, bringing totals to 428.9 mmbbls.
However, "US inventory data highlighted continued stress in refined products, with gasoline stocks falling to their lowest seasonal level since 2012 and diesel inventories to a record low, just ahead of the winter demand season," Saxo Bank analysts said.