Oil Prices Slide as Truce Hopes Outweigh Saudi Arabia Attacks

Oil prices fell on Friday as markets weighed the possibility of a truce between the US and Iran against concerns that increasing attacks by Houthi rebels in Saudi Arabia could disrupt supply from the key Middle Eastern producer.

The US and Iranian negotiators are exploring a phased path out of war, with Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran. Iranian President Masoud Pezeshkian said it was up to the US to choose when the Iran war will end.

Since the war began at the end of February, around a fifth of the world's oil and gas shipments have been curtailed. Diplomatic hopes are helping oil prices weather the latest military strikes in the Middle East, with crude trading moderately softer despite the attacks.

The spread between Brent and WTI is the widest it has been since May at $12.50 a barrel, largely due to fears of a US ban on diesel exports that could flood the domestic market. Saudi Arabia intercepted six ballistic missiles fired by Yemen's Iran-backed Houthis, thwarting attacks on the southern province of Taif and the Yanbu area on the Red Sea.