Oil prices whipsawed on Friday, ending the session mixed but posting strong gains for the week as markets balanced ongoing supply disruptions against renewed prospects for U.S.-Iran diplomacy. Brent crude settled at $105.33 per barrel, up 0.3%, while U.S. West Texas Intermediate (WTI) declined 1.5% to $94.40.
Early in the session, prices moved higher on escalating geopolitical risks, including continued tensions in the Strait of Hormuz and signs of stalled progress toward reopening the key shipping route. However, gains were pared after reports that Iranian and U.S. officials may resume talks, with high-level diplomatic engagement expected in Pakistan.
Additional pressure came from indications that Iran could present a proposal aimed at meeting U.S. demands, reinforcing hopes for a potential de-escalation. The possibility of renewed negotiations prompted traders to reduce positions ahead of the weekend, contributing to late-session weakness.
Despite the diplomatic signals, physical supply conditions remain highly constrained. Traffic through the Strait of Hormuz continues at a fraction of normal levels, with only a handful of vessels transiting the waterway. The continued disruption underscores the limited progress in restoring flows through a corridor that typically handles around 20% of global oil supply.
Market sentiment remains highly reactive to headlines, with price action reflecting rapid shifts between escalation risks and negotiation optimism. While an open-ended ceasefire has reduced immediate downside risks, the lack of a formal agreement continues to support a geopolitical risk premium—particularly in Brent and refined products.
Looking ahead, the trajectory of oil prices will depend heavily on the outcome of potential talks and whether tangible progress is made toward restoring maritime flows. In the absence of a resolution, markets remain vulnerable to further upside driven by prolonged supply disruptions.