Oil prices climbed on Friday as investors remained uncertain about the prospects of a breakthrough in ongoing US-Iran peace negotiations, while concerns over supply disruptions through the Strait of Hormuz continued to support the market.Brent crude futures rose $2.38, or 2.3 per cent, to $104.96 a barrel by 0034 GMT, while US West Texas Intermediate (WTI) crude gained $1.73, or 1.8 per cent, to $98.08 per barrel.Despite Friday’s gains, both benchmarks were still heading for a weekly decline after falling nearly 2 per cent on Thursday to their lowest closes in almost two weeks.
Peace talks remain uncertain
A senior Iranian source cited by Reuters said that no agreement had yet been reached between Tehran and Washington, although “the gaps have narrowed”. Meanwhile, US secretary of state Marco Rubio said there had been “some good signs” during negotiations but stressed that any toll system in the Strait of Hormuz would be “unacceptable”.Market participants remain worried that instability in the Middle East could continue to disrupt global oil supplies.“With the outlook for peace talks still uncertain, oil prices are rising on expectations that Middle East instability and supply disruptions linked to the Strait of Hormuz will persist,” Satoru Yoshida, a commodity analyst at Rakuten Securities, told Reuters.“WTI is likely to remain in a $90–$110 range next week, as it has largely done since late March,” he added.
Strait of Hormuz concerns continue
Nearly 20 per cent of global energy supplies passed through the Strait of Hormuz before the conflict disrupted flows.Around 14 million barrels per day of oil, equal to roughly 14 per cent of global supply, remain affected, including exports from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.The head of UAE state oil company ADNOC reportedly said full oil flows through the Strait may not return before the first or second quarter of 2027, even if the conflict were to end immediately.
OPEC+ likely to raise output modestly
Meanwhile, four sources cited by Reuters claimed that seven major OPEC+ oil-producing nations are expected to agree to a modest increase in July oil output during their June 7 meeting.However, supply deliveries from several producers continue to face disruptions linked to the Iran conflict, keeping global energy markets on edge over inflation and economic growth concerns.
