Oil prices extended their decline for a third straight session as Iran and Oman moved ahead with talks on a framework that could help restore shipping through the Strait of Hormuz, easing some of the supply concerns that have driven crude sharply higher this year.
Brent crude fell below $87 a barrel, taking its weekly decline to around 8%, while West Texas Intermediate traded near $81. Despite the recent pullback, crude remains more than 40% higher this year as the US-Iran conflict continues to disrupt energy flows from the Persian Gulf.
Iranian Foreign Minister Abbas Araghchi and Omani Foreign Minister Badr Albusaidi discussed an "interim framework" aimed at establishing a temporary joint maritime corridor through the strategic waterway, according to a statement carried by Oman News Agency.
Iranian Deputy Foreign Minister Kazem Gharibabadi was cited by semi-official Tasnim news agency as saying the two countries would negotiate a new permanent route within 30 to 60 days. He said a temporary route had been agreed, although details on when talks over the permanent arrangement would begin were not provided.
ALSO READ: Iran, Oman Propose Temporary Hormuz Navigation Corridor, Plan Mine-Clearing Project
US Sanctions Fail To Lift Oil
The latest developments come after the US unveiled plans to increase economic pressure on Tehran. However, Washington stopped short of imposing secondary sanctions on major trading partners, including China, the biggest buyer of Iranian crude. That has limited the immediate impact on oil-market expectations.
Additional supply signals are also weighing on prices. The American Petroleum Institute reported that US crude inventories increased by 4.2 million barrels last week, according to a document seen by Bloomberg. If confirmed by official data, it would mark a fourth consecutive weekly build.
Meanwhile, Russia is considering extending restrictions on overseas diesel shipments by another month as Ukrainian attacks continue to hit refineries, potentially keeping global diesel supplies tight.
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