Oil prices fell on Friday and were on course to end a two-week run of weekly gains, despite continued uncertainty surrounding relations between the United States and Iran.
Brent crude futures declined 60 cents, or 0.67%, to $89.10 per barrel at 0636 GMT, while West Texas Intermediate crude futures fell 64 cents, or 0.77%, to $82.89.
Both benchmarks were heading for weekly losses. Brent was down 5.3% for the week, while WTI had fallen 4.3%.
Oil flows through Strait of Hormuz show signs of recovery
The weekly decline came despite continuing diplomatic tensions between Washington and Tehran.
“Despite diplomatic efforts hitting a roadblock, there are growing signs of additional oil flowing through the Strait of Hormuz,” ING analysts said in a note. “As the conflict persists, producers are adapting to the new realities and becoming increasingly comfortable navigating the strait.”
Goldman Sachs estimated on Thursday that recent total Gulf oil exports were running at between 15 million and 16 million barrels per day.
That level remained between 7 million and 8 million barrels per day below pre-war volumes but was 5 million to 6 million barrels per day above the low recorded in March, according to the bank’s estimate.
U.S. reportedly not seeking to revive June Iran agreement
Oil had settled higher in the previous session following a Wall Street Journal report concerning the Trump administration’s position on negotiations with Iran.
Citing people familiar with the matter, the report said the administration had repeatedly told mediators that it was not interested in reviving the memorandum of understanding reached in June, complicating efforts to restart negotiations.
Earlier on Thursday, Washington said it was not holding talks with Iran despite diplomatic efforts by other countries to bring the two sides back into discussions.
U.S. imposes additional sanctions on Iran
The United States on Monday announced measures that it described as the “toughest sanctions in history” against Iran.
Tehran described the sanctions as an “inhumane and hostile act” and said they had lost their effectiveness.
The descriptions represent the respective positions of the U.S. and Iranian governments.
Russia warns over British-supplied missiles
Geopolitical tensions also remained in focus following a warning from Moscow concerning Ukraine’s use of British-supplied long-range cruise missiles against targets in Russian territory.
Russia warned that it could strike British military targets inside and outside Ukraine in response to those attacks.
U.S. President Donald Trump, however, said Russian President Vladimir Putin would not attack a North Atlantic Treaty Organization country.
Trump also played down media reports that CIA Director John Ratcliffe had warned Russian officials this week against such an attack.
Britain is a founding member of NATO.