Oil prices rose on Friday, recovering part of the losses from the previous session, but were still set to record their first weekly decline in almost two months as easing supply concerns and diplomatic developments weighed on sentiment.
Brent crude futures climbed 78 cents, or 1.2%, to $68.33 a barrel by 06:58 GMT, while U.S. West Texas Intermediate crude added 80 cents, or 1.3%, to $64.09 a barrel.
Even with the rebound, Brent was heading for a weekly loss of about 3.3% and was down roughly 4.8% from the highs reached in late January. WTI was also on track to fall around 1.8% for the week and remained about 3.4% below last month’s near six-month peak, which followed warnings from U.S. President Donald Trump of possible action against Iran.
Markets remained cautious amid uncertainty over the agenda for talks between the United States and Iran scheduled to take place in Oman later in the day. Tehran has signalled it wants discussions confined to nuclear issues, while Washington is pressing to broaden the talks to include Iran’s ballistic missile programme and its backing of armed groups across the region.
“The two sides remain well apart, leaving tensions elevated,” ANZ analyst Daniel Hynes said in a note. “This should see the geopolitical risk premium remain in place.”
Any renewed escalation could pose risks to global oil supplies, as roughly 20% of the world’s oil consumption moves through the Strait of Hormuz between Oman and Iran. Major exporters including Saudi Arabia, the United Arab Emirates, Kuwait and Iraq rely on the route, as does fellow OPEC member Iran.
However, analysts noted that a reduction in geopolitical risk could expose weaker market fundamentals. “We think that geopolitical fears will give way to weak fundamentals,” Capital Economics analysts said in a note, citing a rebound in Kazakhstan’s oil output that could help drive prices toward $50 a barrel by the end of 2026.
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