U.S. crude futures edged higher on Friday, but prices were still heading for their first weekly decline in seven weeks, as easing supply worries shifted attention to the outcome of U.S.-Iran nuclear talks in Oman later in the day.
Brent crude futures climbed 25 cents, or 0.4%, to $67.80 a barrel by 03:53 GMT, while U.S. West Texas Intermediate (WTI) crude also gained 25 cents, or 0.4%, to $63.54 a barrel.
Despite Friday’s modest rebound, both benchmarks have fallen more than 3% from near six-month highs reached in late January, when Donald Trump threatened military action against Iran. Markets are now focused on whether diplomatic talks can reduce tensions between Washington and Tehran.
Uncertainty remains high, however, as the two sides have yet to agree on an agenda. Iran wants discussions limited to nuclear issues, while the U.S. is pushing to also address Tehran’s ballistic missile program, its regional alliances, and domestic policies.
“The two sides remain far apart, keeping geopolitical risks elevated,” said Daniel Hynes, an analyst at ANZ, noting that this divide is likely to sustain a risk premium in oil prices.
Any escalation could threaten global energy supplies, given that roughly one-fifth of the world’s oil consumption passes through the Strait of Hormuz, a critical chokepoint between Oman and Iran. Major producers such as Saudi Arabia, United Arab Emirates, Kuwait, Iraq, and Iran rely heavily on the strait to export crude.
Conversely, analysts say a diplomatic breakthrough could ease fears of disruption and put further pressure on prices. Capital Economics noted that geopolitical risks may eventually give way to weaker fundamentals, citing a recovery in Kazakhstan’s oil output, which could help drive crude prices lower toward $50 per barrel by the end of 2026.
