Oil prices moved lower on Friday and were on track to end a two-week winning streak, even as tensions between the United States and Iran remained elevated.
Brent crude futures fell 60 cents, or 0.67%, to $89.10 per barrel by 06:36 GMT. West Texas Intermediate crude futures dropped 64 cents, or 0.77%, to $82.89.
Both major oil benchmarks were heading for weekly losses. Brent was down about 5.3% for the week, while WTI was on course to fall roughly 4.3%.
Oil Flows Through Strait of Hormuz Improve
Despite stalled diplomatic efforts, analysts noted signs that more oil is moving through the Strait of Hormuz.
ING analysts said producers appear to be adapting to the ongoing conflict and becoming more comfortable operating through the strategically important shipping route.
The improving flow of crude has helped reduce some concerns over potential supply disruptions.
Gulf Oil Exports Recover From March Lows
Goldman Sachs estimated that recent Gulf oil exports were running at between 15 million and 16 million barrels per day.
That remains roughly 7 million to 8 million barrels per day below levels seen before the war.
However, exports are now estimated to be around 5 million to 6 million barrels per day higher than the lowest levels recorded in March.
The recovery in regional oil shipments has helped ease some of the supply fears that previously supported crude prices.
U.S.-Iran Diplomacy Remains Stalled
Oil prices had settled higher in the previous session after a Wall Street Journal report said U.S. President Donald Trump was not interested in returning to earlier agreement terms with Iran.
According to the report, the Trump administration has repeatedly told mediators that it does not want to revive the memorandum of understanding reached in June.
This position has complicated international efforts to bring Washington and Tehran back to the negotiating table.
Earlier on Thursday, U.S. officials also said Washington was not holding direct talks with Iran, despite efforts by other countries to restart negotiations.
New U.S. Sanctions Add Pressure on Iran
The United States announced a new round of sanctions against Iran earlier this week, describing them as the toughest restrictions imposed so far.
Iran strongly criticized the measures, calling them hostile and arguing that sanctions had become increasingly ineffective.
The escalation has kept geopolitical risks elevated across energy markets.
Russia-Ukraine Tensions Add to Global Risk
Geopolitical concerns were not limited to the Middle East.
Russia warned that it could target British military assets inside and outside Ukraine in response to attacks on Russian territory involving British-supplied long-range missiles.
The warning added another source of uncertainty for global markets.
However, Trump said he did not expect Russian President Vladimir Putin to attack a NATO member. He also played down reports that CIA Director John Ratcliffe had recently warned Russian officials against such an escalation.
Britain remains one of NATO’s founding members.
Overall, oil prices remain caught between persistent geopolitical risks and signs that crude supplies through the Gulf are recovering. For now, improving export flows appear to be outweighing some of the support created by ongoing tensions with Iran.
