Oil prices edged lower on Friday as traders assessed two competing developments: the possibility of a diplomatic breakthrough between the US and Iran and fresh concerns over the security of Saudi Arabia’s energy infrastructure. During intraday trading, West Texas Intermediate (WTI) crude was down 1.91 points, or 2.02 per cent, at $92.70 a barrel. Brent crude fell 1.30 points, or 1.22 per cent, to $105.3 a barrel.
The move came a day after a strong recovery in both benchmarks, highlighting the sharp swings that have characterised the oil market amid continuing geopolitical uncertainty.
Brent crude and WTI had surged by as much as 5 per cent during Thursday’s session. Brent eventually finished 3.4 per cent higher, while WTI settled with a 2.7 per cent gain.
Brent’s latest close marked its strongest level since September 15. For WTI, Thursday’s advance brought an end to a six-session losing run during which the US benchmark had lost 13 per cent.
Despite the rebound, the two contracts have posted different performances over the week. WTI is down 6.42 per cent for the week, while Brent has gained 2.09 per cent.
US-Iran Talks Put Strait Of Hormuz In Focus
The prospect of a potential US-Iran agreement has become an important factor for the oil market. Discussions are reportedly focused on a phased arrangement under which Iran could reopen the Strait of Hormuz, while the US could ease its economic blockade of Tehran.
The strategic waterway has been at the centre of global energy-supply concerns since the conflict began at the end of February. Disruptions have affected roughly one-fifth of global oil and gas shipments, contributing to a sharp increase in crude prices, with prices rising 50 per cent in March alone.
The supply disruption has also prompted LNG buyers to look beyond traditional sources in search of alternative and more dependable supplies of the fuel.
Iran Says Washington Has A Key Role
Iranian President Masoud Pezeshkian said on Thursday that Washington would have to make the decision on whether the conflict ends. “It’s America that must choose whether it wants to end this or not,” Pezeshkian said, responding to a question in an interview aired on Thursday on Fox News.
The comments came as negotiators continued to explore possible steps towards de-escalation between the two countries.
While diplomatic developments have raised hopes of easing supply pressures, fresh military activity near Saudi Arabia has kept concerns about oil infrastructure and exports alive.
Saudi Arabia said it had intercepted six ballistic missiles launched by Yemen’s Iran-backed Houthis. According to Saudi authorities, the interceptions prevented attacks targeting the southern province of Taif and the Yanbu area on the Red Sea.
Saudi Arabia has also been increasing crude flows through its East-West Pipeline towards Yanbu, an important Red Sea export hub. However, crude tanker loadings have yet to restart, according to industry sources, satellite imagery and shipping data.
