Oil Prices Slide Amid US-Iran Truce Hopes, Ongoing Middle East Tensions
Oil prices declined slightly on Friday as markets weighed the possibility of a truce between the US and Iran against the bombing of Saudi Arabia by Houthi rebels. Brent fell to $105.85 a barrel, down 0.69%, while West Texas Intermediate (WTI) dropped to $93.80 a barrel, down 0.86%.
The decrease in oil prices comes after a week of volatility when prices rose to a one-week high on Thursday. Brent settled up 3.4% and WTI was 2.7% higher. However, the US-Iran negotiations in New York are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran.
Tim Waterer, chief analyst at KCM Trade, noted that diplomatic hopes are helping oil prices weather the latest military strikes in the Middle East. Since the war began in February, around a fifth of the world's oil and gas shipments have been curtailed, pushing up prices by 50% in March alone.
Saudi Arabia intercepted six ballistic missiles fired by Yemen's Iran-backed Houthis on Thursday, thwarting attacks on the southern province of Taif and the Yanbu area. Waterer said that ongoing attacks serve as a clear reminder that critical oil assets remain firmly in the firing line.