Global oil prices declined on Friday as hopes of easing tensions between the United States and Iran reduced concerns about potential disruptions to crude supplies from the Middle East.
Brent crude futures fell by $1.68, or 1.61%, to $102.60 per barrel by 0819 GMT, while US West Texas Intermediate (WTI) crude dropped $1.31, or 1.43%, to $90.18 per barrel.
Despite Friday’s decline, Brent remained on course for a weekly gain after settling 4% higher on Thursday. WTI, however, was heading towards a slight weekly loss.
Trump’s Comments Ease Market Fears
Oil prices came under pressure after US President Donald Trump said Washington would not launch fresh attacks against Iran before the US midterm elections scheduled for November 3.
Trump also said the two countries were holding “productive discussions” aimed at resolving the conflict, which has disrupted global energy markets.
According to PVM Oil Associates analyst Tamas Varga, Trump’s commitment and China’s planned resumption of refined fuel exports were among the factors pushing prices lower.
However, Varga warned that continued violence across the Persian Gulf and around the Red Sea could undermine expectations of a lasting recovery in regional oil shipments.
He said the developments had made a sustained decline in oil prices unlikely in the near future.
Iran Reviews US Response to Hormuz Proposal
Iran’s Tasnim news agency reported on Thursday that Foreign Minister Abbas Araqchi said Tehran was examining Washington’s response to its proposal to reopen the Strait of Hormuz within seven days.
The waterway is a critical route for global energy supplies, and any prolonged disruption could have significant consequences for oil prices.
XS.com analyst Linh Tran said the possibility of easing tensions would need to be supported by tangible progress in negotiations and improved safety for vessels travelling through the strait.
Meanwhile, Washington continued applying economic pressure on Tehran. On Thursday, the US imposed sanctions targeting individuals, networks and 17 vessels accused of transporting Iranian crude oil, petroleum products and petrochemicals.
The conflict, now in its eighth month, has contributed to volatility in energy markets.
Middle East Conflict Continues to Threaten Oil Supplies
Oil prices have fluctuated throughout the week as threats to commercial shipping increased across the Gulf and the Strait of Hormuz.
Before the war, the strait carried shipments equivalent to approximately 20% of global oil and fuel supplies, making it one of the world’s most important energy transit routes.
The conflict in the Middle East, alongside the war between Russia and Ukraine, has also disrupted supplies of refined petroleum products, including gasoline, aviation fuel and diesel.
China, the world’s largest oil importer, is expected to resume refined fuel exports following a temporary suspension during its Golden Week holiday. The move could help ease tightness in the global fuel market, according to a Reuters report citing sources.
Hurricane Isaias Disrupts US Oil Production
Beyond geopolitical tensions, the oil market is also dealing with the effects of Hurricane Isaias in the Gulf of Mexico.
The storm had forced producers to shut down approximately 1.3 million barrels of oil per day, representing 62.9% of current production in the affected area, as of Thursday, according to the US Marine Minerals Administration.
Tran said the disruption was providing additional support for oil prices, although the duration of its impact would depend on inspections of damaged facilities and how quickly operations could resume.
With diplomatic developments, shipping risks and weather-related disruptions all affecting supply expectations, oil prices remain sensitive to changes in the global energy outlook.
