US-Iran Diplomatic Hopes Weigh on Oil Prices Amid Ongoing Conflict

Oil prices declined on Friday as hopes for a possible ceasefire between the US and Iran outweighed concerns over renewed Houthi attacks on Saudi Arabia. Brent crude fell $0.40, or 0.4%, to $106.20 a barrel, while US West Texas Intermediate (WTI) declined $1.02, or 1.1%, to $93.59.

The market has been closely watching diplomatic contacts between Washington and Tehran, with sources saying negotiators in New York are examining a phased pathway toward ending the conflict. Under this framework, Iran could reopen the Strait of Hormuz while the US would ease its economic blockade against Tehran.

The war has already disrupted global energy markets, with around one-fifth of global oil and gas shipments reportedly curtailed since fighting began at the end of February.