US-Iran Talks Send Oil Prices Tumbling Amid Middle East Uncertainty
Oil prices declined by around 2% on Friday as growing expectations of a possible truce between the United States and Iran eased concerns over prolonged disruption to Middle Eastern energy supplies.
The decline came as US and Iranian negotiators in New York examined a phased route towards ending the conflict, with a potential arrangement involving Iran reopening the Strait of Hormuz and the United States easing its economic blockade of Tehran.
However, Iran has indicated that it would not compromise on its nuclear programme, despite the possibility of reopened waterways. Senior Iranian officials told Reuters that Tehran's position would remain unchanged even if Washington accepted an Iranian proposal to reopen the strategic waterway.
The prospect of a US diesel export restriction also affected oil markets, with analysts at energy advisory firm Ritterbusch and Associates saying it could leave US refiners with additional diesel supplies, potentially reducing the amount of crude they process.