Oil Prices Turn Lower After Iran Submits New Proposal
Oil prices reversed earlier gains on Friday, moving lower after Iran’s state media reported that Tehran had submitted a new proposal to Pakistani mediators. The development comes as supply disruptions continue amid the ongoing standoff between the United States and Iran.
Brent crude futures for July declined 1.7% to $108.51 per barrel. The June Brent contract had expired a day earlier after reaching a four-year high above $126 per barrel.
Meanwhile, West Texas Intermediate (WTI) crude futures for June dropped 3.1% to $101.79 per barrel.
Oil Recently Hit Multi-Year Highs
Crude prices had surged sharply on Thursday, reaching their highest levels since the 2022 Russia-Ukraine War. The rally was driven by escalating tensions, including reports that Donald Trump was considering additional military actions against Iran.
Potential measures reportedly included reopening the Strait of Hormuz by force, conducting further strikes, or targeting Iran’s enriched uranium through special operations.
Ongoing Blockade and Rising Tensions
The U.S. has maintained its naval blockade on Iran, with policymakers signaling that sustained economic pressure could push Tehran toward negotiations. However, tensions remain elevated.
Iran’s Supreme Leader, Mojtaba Khamenei, stated that the country will retain control over the Strait of Hormuz and continue to protect its nuclear and missile capabilities.
Deadlock Persists in U.S.-Iran Conflict
Despite an extended ceasefire, diplomatic efforts between Washington and Tehran have made little progress, indicating a prolonged geopolitical stalemate that has now stretched beyond two months.
Market analysts note that the gap between physical and paper oil markets is narrowing as supply tightness begins to emerge. Concerns are growing that the continued closure of the Strait of Hormuz could prolong production shutdowns among Persian Gulf producers.
Supply Risks Keep Oil Market Volatile
The Strait of Hormuz remains a critical artery for global energy supply, accounting for roughly 20% of the world’s oil shipments. Any prolonged disruption is expected to support oil prices in the near term, even as short-term volatility persists due to shifting geopolitical developments.
