Oil Prices Edge Higher but Set for Second Weekly Loss Amid Iran De-escalation Hopes

Crude oil prices edged higher on Thursday, but the benchmarks remain on track for a second weekly drop as Washington’s focus on blockading Iran and applying economic pressure eases fears of a direct military conflict.

Brent futures rose 85 cents, or 0.9%, to $96.67 a barrel, while US West Texas Intermediate futures climbed 44 cents, or 0.5%, to $89.18 a barrel, according to RTÉ.

For the week, both Brent and WTI are heading for a decline of about 2%.

That follows a sharp pullback from earlier highs, with Brent retreating more than 22% from a six-month high of $118 touched on October 30th, as reported by The Irish Times. Trading has remained volatile during the ninth month of the US-Israeli war on Iran, with market sentiment swinging between diplomatic hopes and ongoing regional attacks on energy infrastructure.

Sanctions Replace Strikes

President Donald Trump indicated on Truth Social that a formal deal with Iran was not necessary to end the conflict, writing that Washington has “got their money, Hundreds of Billions of Dollars, and we’ve got their Strait!” according to Oilprice.

“Trump’s indications that further military escalation against Iran may not be necessary have raised expectations that Washington could increasingly rely on economic sanctions and restrictions on oil shipments rather than intensifying military operations,” Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet, told RTÉ.

Adding to the downward pressure on prices, US crude and fuel inventories rose over the week due to softer refined products demand and an increase in oil imports, according to the Energy Information Administration. CNBC reported that US crude stocks rose by 9 million barrels in the latest week, citing American Petroleum Institute data ahead of the official government release.

“Markets are falling on expectations that behind-the-scenes efforts are underway to secure a ceasefire between Russia and Ukraine and that it is unlikely the Iran war will escalate ahead of the US-China summit next week,” Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities, said.

Shipping Risks Remain

Geopolitical tensions persist around key chokepoints despite the dip in headline prices. The Iranian military stated that four oil tankers were struck by explosions in the Strait of Hormuz after ignoring warnings, though Reuters could not immediately verify the accounts. At the same time, Yemen’s Iran-aligned Houthis reported attacks on a pumping station along the Saudi East-West oil pipeline, an oil facility in Yanbu, and an Aramco building in Riyadh, RTÉ noted.

“Geopolitical risks remain elevated, and any fresh disruption to oil supplies could quickly reignite upward pressure on prices,” Sachdeva told RTÉ.

On the production side, OPEC output rose in October, driven by gains in Saudi Arabia, Kuwait, and Iraq, even with export constraints in the Strait of Hormuz. Saudi Arabia’s crude production rebounded to 10.56 million barrels daily last month, returning to pre-war levels, according to Oilprice.

Meanwhile, US-brokered peace talks between Russian and Ukrainian officials took place in Abu Dhabi, contributing to broader market adjustments as negotiators agreed to a major prisoner exchange, CNBC reported.

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