US and Iran Explore Path Out of War as Oil Prices Drop
Oil prices dropped around 3% on Friday as hopes for a truce between the US and Iran rose. The development comes despite concerns about increasing attacks against Saudi Arabia by Houthi fighters, which could disrupt oil supply from the Middle East.
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 on Iran. This potential agreement would help to alleviate tensions in the region and stabilize oil prices.
Brent futures rose $2.96, or 2.8%, to $103.64 a barrel by 12:12 p.m. EDT (1612 GMT), while West Texas Intermediate (WTI) crude fell $2.86, or 3.0%, to $91.75.
Tim Waterer, chief analyst at KCM Trade, noted that 'diplomatic hopes are essentially helping oil prices weather the latest military strikes in the Middle East, with crude trading moderately softer despite the attacks.'