Brent crude erased earlier losses to trade near $80 a barrel as traders recalibrated risk following a new threat from Yemen's Houthi militant group.
The rebels warned of renewed attacks on shipping in the Middle East, a development that quickly dampened market optimism stemming from ongoing US-Iran diplomatic talks.
The price stabilization underscores the persistent vulnerability of global energy supply chains to regional instability.
While diplomatic channels between Washington and Tehran offer a potential path to de-escalation, the Houthi threat reintroduces immediate uncertainty regarding the security of key maritime routes, particularly the Red Sea and the Strait of Hormuz.
This volatility follows a period of mixed signals for the oil market.
Crude prices had retreated earlier in the week after Houthi leaders provided assurances that they would not close the Red Sea to commercial traffic.