Oil prices declined on Friday as traders became more confident that tensions between the United States and Iran were less likely to escalate into a broader conflict.
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As a result, both major crude benchmarks recorded significant losses at the close of trading.
Brent and WTI Post Daily Losses
Brent crude futures settled at $93.09 per barrel, down $1.94 or 2.04%.
Similarly, U.S. West Texas Intermediate (WTI) crude finished at $90.54 per barrel, losing $2.50 or 2.69%.
The declines followed losses in the previous trading session, when Brent dropped 2.84% and WTI fell 3.1%.
According to market analysts, investors responded positively to signs of reduced geopolitical risk in the Middle East.
Market Sees Lower Risk of Conflict
Phil Flynn, senior analyst at Price Futures Group, said the market currently sees fewer signs of escalation between Washington and Tehran.
Furthermore, he noted that traders appear to be focusing on de-escalation despite the absence of a formal agreement.
Consequently, concerns over major disruptions to global oil supplies have eased.
Earlier in the week, oil prices had risen as uncertainty surrounding U.S.-Iran peace talks increased and tensions in the Middle East persisted.
Oman Operations Continue Normally
Meanwhile, Petroleum Development Oman said operations at Mina al Fahal port remained unaffected despite reports of an explosion near mooring berths.
Earlier, sources indicated that oil loading activities had been temporarily suspended.
However, the company later confirmed that export operations continued without disruption.
The terminal exports between 800,000 and 900,000 barrels of crude oil per day.
Weekly Gains Still Expected
Despite Friday’s decline, both oil benchmarks remained on track to post weekly gains.
Brent crude was up 1.18% for the week, while WTI had gained around 3.64%.
Earlier gains came as fighting intensified in parts of the Middle East and uncertainty surrounded shipping routes through the Strait of Hormuz.
Notably, around one-fifth of the world’s oil supply passes through the strategic waterway.
OPEC Maintains Demand Forecast
Meanwhile, OPEC Secretary General Haitham Al Ghais said the organization would maintain its forecast for global oil demand growth of 1.2 million barrels per day this year.
He made the remarks despite ongoing regional tensions and concerns over shipping disruptions.
In addition, analysts at Commerzbank said hopes for a future U.S.-Iran agreement had provided some support for oil and natural gas prices this week.
However, they added that ample inventories, rerouted exports, and weaker demand have limited further price gains.
Regional Developments Remain in Focus
Investors continue to monitor developments involving Iran, Israel, and Lebanon.
Moreover, comments from political leaders and ongoing diplomatic efforts remain key drivers of market sentiment.
Although optimism has improved, analysts caution that uncertainty persists.
Therefore, traders are expected to remain focused on geopolitical developments and their potential impact on global energy supplies in the coming weeks.
