WTI crude jumped 2.3 per cent to $100.50 a barrel and Brent climbed 1.8 per cent to $106.90 on Thursday afternoon after Reuters reported that Iran's supreme leader Ayatollah Ali Khamenei had directed government officials to keep the country's 440-kilogram stockpile of enriched uranium inside Iranian territory, in defiance of a US precondition for the latest peace proposal.
The directive, conveyed through internal channels of the Supreme National Security Council, effectively rules out the centrepiece of the US 14-point peace framework, under which Tehran would have surrendered its highly-enriched stock in exchange for a gradual lifting of sanctions and a US withdrawal from positions near the Strait of Hormuz.
Iran's foreign ministry spokesperson did not directly address the Reuters report but reiterated at the regular press briefing that the country was "reviewing the American side's views" through Pakistani mediators. President Donald Trump told reporters at the White House the US would "wait a few days" for "the right answers".
The shipping market reaction was sharper than the headline crude move. Frontline tanker rates on the Persian Gulf to Singapore route jumped 14 per cent on the day, and the war-risk insurance premium on hulls transiting Hormuz reset to a fresh post-2003 high. Marine insurers said the directive shifted the probability distribution on a renewed kinetic exchange.
Equity markets had a tougher session: the S&P 500 fell 0.45 per cent and the Nasdaq 100 lost 0.5 per cent, with energy the only major sector to gain. The dollar index added 0.2 per cent and gold pushed back through $4,570 an ounce. US two-year Treasury yields ticked up to 4.06 per cent on the inflation read-through.