Oil prices steadied at the end of a volatile week, with crude cooling after reports emerged that US President Donald Trump stated that Iran had called to make a deal, while efforts continued to bring Washington and Tehran back to the negotiating table.
Brent crude traded near $76 a barrel after falling more than 2% on Thursday, while West Texas Intermediate was below $72. Oil remained higher for the week as traders continued to assess disruptions to flows through the Strait of Hormuz.
Trump's comments raised hopes of a possible diplomatic breakthrough after a fresh flare-up in fighting. Qatar and Pakistan are also trying to bring the US and Iran back into negotiations, according to media reports. Technical talks between Washington and Tehran are continuing, according to a US official, who said the US remained committed to finding a solution. However, the status of an earlier truce remained unclear after Trump said the deal was over.
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The uncertainty follows a fresh flare-up in hostilities. After a series of attacks on vessels in the Strait of Hormuz, US forces struck targets in Iran over two days this week. Tehran responded with attacks on American bases in the region. Still, both sides have so far stopped short of returning to all-out war. Some provisions of their interim agreement, which has not been formally scrapped, also continue to be observed.
The latest hostilities have substantially slowed observed transits through Hormuz. Vessel traffic appeared to have nearly ground to a halt as of Thursday, putting the waterway back at the centre of the oil market's focus. However, a trickle of tankers that managed to leave the Persian Gulf in recent weeks has largely cleared an earlier backlog of vessels trapped in the region.
Traders are now watching whether vessel movements through Hormuz resume, along with production and sales from Persian Gulf oil producers. Saudi Arabia, the world's top crude exporter, is also due to release its monthly allocations to customers shortly.
The US Central Command said Iran does not control the Strait of Hormuz, adding that American forces had helped more than 800 vessels transit the waterway since May.
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