Oil prices moved lower on Friday as crude markets weighed diplomatic efforts to resolve the conflict against ongoing military strikes in the Middle East. Brent crude dropped 74 cents, or 0.69 percent, to $105.85 a barrel at 0032 GMT, while West Texas Intermediate fell 81 cents, or 0.86 percent, to $93.80 a barrel, according to Reuters reporting.
Diplomatic Talks and Strait of Hormuz Negotiations
US and Iranian negotiators meeting in New York are discussing a phased path out of the conflict, according to sources close to the talks cited by Reuters. The framework under discussion involves Tehran reopening the Strait of Hormuz while Washington lifts its economic blockade of Iran. The negotiations come after months of severe disruptions following the outbreak of war at the end of February, which curtailed approximately one-fifth of global oil and gas shipments and drove up prices by 50 percent in March alone.
“Diplomatic hopes are essentially helping oil prices weather the latest military strikes in the Middle East, with crude trading moderately softer despite the attacks,” said Tim Waterer, chief analyst at KCM Trade.
Iranian President Masoud Pezeshkian stated on Thursday during a Fox News interview that it remains up to Washington to decide when the war will conclude, noting that America must choose whether to end the hostilities.
Market Volatility and Saudi Oil Asset Attacks
Friday’s slight decline follows a volatile week that saw crude prices surge to a one-week high on Thursday. Both major contracts jumped as much as 5 percent, with Brent settling up 3.4 percent and WTI rising 2.7 percent. Brent recorded its highest close since September 15, marking a stark contrast for WTI, which had fallen 13 percent over the prior six sessions before Thursday’s rebound.
The downward pressure on Friday was tempered by renewed military activity in the region. The Saudi-led coalition in Yemen reported that Saudi Arabia intercepted six ballistic missiles fired by Yemen’s Iran-backed Houthi rebels, successfully thwarting attacks directed at the southern province of Taif and the Yanbu area on the Red Sea. These ongoing strikes serve as a clear reminder that critical oil assets remain firmly in the firing line, according to KCM Trade analyst Tim Waterer.
In response to supply route risks, industry sources, satellite imagery, and shipping data indicate that Saudi Arabia is increasing crude pumping volumes through the East-West Pipeline to its Red Sea export hub at Yanbu, though crude tanker loadings have not yet resumed.
Worth a look