Oil rises as investors weigh Hormuz talks

Analysts said the talks between Iran and Oman had shifted the mood in the market.

"The market has moved from pricing a high probability of prolonged disruption and renewed escalation towards pricing partial reopening, negotiated shipping arrangements and a lower risk of renewed military confrontation," said Saxo Bank head of commodity strategy Ole Hansen.

"A credible agreement that rapidly restores Hormuz traffic could remove another layer of geopolitical premium."

Iran and Oman are working on the details of the agreement on the strait, a senior Iranian source said on Wednesday, after Iran's Revolutionary Guards said the two countries had agreed how to share the waterway and its revenues.

Until U.S.-Israeli airstrikes began a war on Iran at the end of February, the Strait of Hormuz was the route for around a fifth of global oil and gas supplies.