Oil prices were broadly stable on Friday as traders prepared for the long U.S. holiday weekend and monitored developments in negotiations between the United States and Iran.
Brent crude futures rose 0.2% to $71.96 per barrel by 05:21 ET, or 09:21 GMT. U.S. West Texas Intermediate crude remained nearly unchanged at $68.66 per barrel.
U.S.-Iran Talks Remain in Focus
Investors have removed part of the geopolitical risk premium that had previously supported crude prices.
The shift followed the signing of an interim Middle East peace agreement last month. Expectations of improving oil flows from the Gulf have also strengthened forecasts of sufficient near-term supply.
Markets continued to watch negotiations between Washington and Tehran for signs of further progress.
U.S. President Donald Trump said he believed Iran had accepted most of Washington’s demands, suggesting that talks were moving in a positive direction.
Strait of Hormuz Remains a Key Dispute
Despite the optimism, major disagreements remain unresolved.
The Wall Street Journal reported that Iran had resisted a proposal to give up its claims over the Strait of Hormuz in exchange for access to billions of dollars in frozen funds.
According to the report, Washington offered financial incentives to secure unrestricted shipping through the strategically important waterway. However, Tehran has so far rejected the proposal.
Shipping Activity Begins to Recover
The Strait of Hormuz has become one of the main issues in the U.S.-Iran peace negotiations.
Iran effectively closed the route after the joint U.S.-Israeli military campaign began in late February.
The waterway is vital to global energy markets because a significant share of the world’s oil and liquefied natural gas passes through it.
Recent reports suggest that shipping activity through the strait has started to recover, easing some concerns about global energy supplies.
Oversupply Concerns Pressure Oil Prices
Concerns about excess supply continued to limit gains in crude futures.
ANZ said an increase in short positions had been a major factor behind the recent weakness in oil prices.
However, some traders reduced their bearish positions before the U.S. Independence Day weekend.
Brent Futures Signal Near-Term Oversupply
ANZ noted that the Brent futures curve remained in contango.
This means near-term oil contracts were trading below longer-dated contracts, a structure that often signals expectations of excess supply in the coming months.
The recovery in crude shipments through the Strait of Hormuz has reinforced this view.
Saudi Arabian oil exports have also returned to approximately 90% of their pre-war levels.
Chinese Refiners Increase Purchases
Lower oil prices have encouraged additional buying from independent Chinese refiners.
Demand has also received support from more flexible pricing offered by Saudi Arabia and Kuwait.
However, Iran continues to face difficulties selling its crude oil.
Iranian Oil Builds Up in Floating Storage
ANZ cited data from Vortexa showing that more than 58 million barrels of Iranian crude remained in floating storage.
More than 90% of those barrels had reportedly not yet secured a final destination.
The large volume of unsold Iranian oil adds to concerns about potential oversupply if sanctions ease or export conditions improve.
Overall, oil prices remained caught between hopes for diplomatic progress and expectations of abundant global supply.
