Brent crude settled down 2.0% at $108.17 per barrel, while U.S. West Texas Intermediate (WTI) fell 3.0% to $101.94. Earlier in the week, Brent surged to $126.41—its highest level since March 2022—highlighting the elevated volatility in the market.
The decline followed reports that Tehran delivered a fresh negotiating proposal via Pakistani mediators, signaling a possible path forward after weeks of deadlock. The development introduced cautious optimism that an eventual resolution could ease supply constraints.
However, underlying fundamentals remain tight. The Strait of Hormuz continues to operate at severely reduced capacity, while U.S. naval actions are restricting Iranian crude exports. Together, these factors continue to disrupt a significant portion of global oil and LNG flows.
A ceasefire remains in place, but tensions persist. Conflicting rhetoric from both sides—including renewed military threats—underscores the fragility of the current situation and limits confidence in a near-term resolution.
For now, oil markets remain highly reactive to geopolitical headlines. While diplomatic progress triggered a short-term selloff, sustained supply constraints and ongoing uncertainty continue to support elevated price levels.