Oil prices climbed more than 1% on Friday, rebounding from sharp losses a day earlier, but were still on track to post their first weekly decline in almost two months as supply worries eased and attention shifted to upcoming U.S.–Iran discussions later in the day.
By 06:58 GMT, Brent crude futures were up 78 cents, or 1.2%, at $68.33 a barrel, while U.S. West Texas Intermediate crude rose 80 cents, or 1.3%, to $64.09 a barrel.
Despite the bounce, Brent was set to finish the week down about 3.3%, retreating roughly 4.8% from late-January highs. WTI was also heading for a weekly loss of around 1.8% and was down about 3.4% from last month’s near six-month peak, reached after U.S. President Donald Trump warned of potential strikes on Iran.
Uncertainty around the agenda for talks between Iran and the United States in Oman has kept investors cautious, with little agreement so far on the scope of the discussions. Tehran has indicated it wants negotiations to focus strictly on nuclear matters, while Washington is pushing to include Iran’s ballistic missile programme and its support for armed groups in 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 between the two countries could threaten oil supplies, as roughly one-fifth of global oil consumption passes through the Strait of Hormuz, which lies between Oman and Iran. Major producers including Saudi Arabia, the United Arab Emirates, Kuwait and Iraq ship most of their crude through the strait, as does fellow OPEC member Iran.
However, if the talks succeed in lowering the risk of conflict, prices could come under further pressure. “We think that geopolitical fears will give way to weak fundamentals,” Capital Economics analysts said in a note, citing a recovery in Kazakhstan’s oil output that could help drive prices down toward $50 a barrel by the end of 2026.