Oil Prices Rise as Uncertainty Over US-Iran Talks Continues
Oil prices moved higher on Friday as investors remained skeptical about the chances of a near-term breakthrough in peace negotiations between the United States and Iran.
Despite the daily gains, both major crude benchmarks stayed on track for significant weekly losses due to ongoing volatility surrounding diplomatic developments and concerns over global energy supply disruptions.
Brent Crude and WTI Recover, But Weekly Losses Persist
Brent Crude futures increased by 0.8%, reaching $103.40 per barrel, while West Texas Intermediate (WTI) rose 0.56% to $96.89 per barrel.
Earlier in the trading session, both oil benchmarks had gained more than 3%.
However, on a weekly basis, Brent crude remained down more than 5%, while WTI had fallen over 8%, reflecting sharp swings in investor expectations regarding a possible peace agreement.
Mixed Signals Emerge From US-Iran Negotiations
Diplomatic efforts aimed at reducing tensions between the United States and Iran continue, but progress appears uncertain.
Reports suggested Pakistan’s military leadership traveled to Iran as mediation efforts intensified. Pakistan has played a recurring intermediary role between United States and Iran.
Meanwhile, a senior Iranian source indicated gaps in negotiations with Washington have narrowed.
Marco Rubio also acknowledged there had been encouraging developments but emphasized that substantial work remains before any agreement can be reached.
Major Obstacles Still Threaten a Deal
Despite signs of progress, significant disagreements remain unresolved.
Key sticking points reportedly include Iran’s uranium stockpile and future control over the strategically important Strait of Hormuz.
The Strait of Hormuz is one of the world’s most critical energy corridors and previously handled roughly 20% of global oil shipments.
Current disruptions have significantly reduced energy flows, contributing to supply shortages and keeping upward pressure on oil prices.
Supply Concerns Continue Supporting Oil Markets
Analysts say global oil inventories are declining rapidly as reduced shipments through the Strait of Hormuz tighten available supply.
Even expectations of a potential ceasefire have failed to trigger sustained declines in crude prices due to fears that restoring normal energy flows could take months or even years.
According to estimates, approximately 14 million barrels per day — around 14% of global oil supply — have been removed from markets because of conflict-related disruptions affecting exports from countries including:
- Saudi Arabia
- Iraq
- United Arab Emirates
- Kuwait
Energy Recovery Could Take Until 2027
The head of ADNOC reportedly warned that full oil flows through the Strait of Hormuz may not return before 2027, even if hostilities end immediately.
This outlook continues fueling concerns over inflation and broader risks to global economic growth.
OPEC+ Expected to Increase Production
Separately, sources indicated several major producers within OPEC+ may support a modest increase in output during their upcoming June meeting.
However, additional production increases may offer limited relief if transportation disruptions persist.
Inflation Risks Remain in Focus
Elevated oil prices continue raising concerns for central banks and policymakers worldwide.
Higher energy costs have already intensified inflation worries and complicated expectations around future interest rate decisions across major economies.
