Oil prices steadied on Friday after posting their first decline of the week, as hopes of progress in US-Iran negotiations countered concerns over the fragile security situation in the Middle East. Brent crude traded around $95 a barrel after falling 2.8% in the previous session, while US benchmark West Texas Intermediate hovered below $93 a barrel.
The pullback came after US President Donald Trump signalled that negotiations with Iran were progressing, raising expectations that a broader agreement could eventually ease disruptions to energy flows through the Strait of Hormuz, one of the world's most important oil transit routes.
Market sentiment remains highly sensitive to developments in the region. While Trump struck an optimistic tone on talks with Tehran, uncertainty persists after Iran-backed Hezbollah rejected a US-backed ceasefire proposal between Israel and Lebanon. The continued conflict has complicated broader diplomatic efforts aimed at reducing tensions across the region.
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Speaking to reporters at the White House, Trump downplayed Hezbollah's rejection of the proposal, saying the group had reached out to discuss a cessation of hostilities.
In a separate social media post, Trump said he was “right in the middle of my final negotiations to end the war with the Islamic Republic of Iran,” though he did not provide further details.
Despite Thursday's decline, crude remains on track for weekly gains. WTI has risen more than 6% this week as traders reassessed expectations around the timing of any breakthrough agreement.
The Strait of Hormuz remains central to the market outlook. The waterway typically handles about a fifth of global crude and liquefied natural gas shipments, making any disruption a major concern for energy markets. However, futures remain significantly below levels seen earlier this year. Both benchmarks are down roughly 20% from early April, when the US and Iran agreed to a ceasefire that ended more than five weeks of fighting.
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