Oil Prices Rise but Weekly Loss Looms as Iran-US Talks Face Obstacles

Oil prices rose on Friday, recovering some ground after recent declines, although both major benchmarks remained on track for weekly losses as investors questioned whether ongoing talks between the United States and Iran would lead to a breakthrough.

Brent crude futures climbed $1.66, or 1.6 percent, to $104.24 a barrel by early trading in Saudi Arabia, while US West Texas Intermediate crude gained $1.11, or 1.2 percent, to $97.46 a barrel.

Despite Friday’s gains, Brent was headed for a weekly decline of 4.6 percent, while WTI was set to fall 7.6 percent over the week. Prices have swung sharply in recent sessions as markets reacted to changing expectations surrounding negotiations between Washington and Tehran.

A senior Iranian official told Reuters that differences between the two sides had narrowed, while US Secretary of State Marco Rubio said there were “some good signs” emerging from discussions.

However, disagreements remain over Iran’s uranium stockpile and restrictions tied to the Strait of Hormuz, a critical shipping route for global energy supplies.

Analysts said markets remain highly sensitive to developments in the Middle East conflict and concerns about global supply disruptions.

David Oxley, chief commodities economist at Capital Economics, said oil prices were unlikely to move substantially lower unless market fundamentals improved significantly, something he believes may not happen before 2027.

The fragile ceasefire that took effect six weeks ago has yet to produce meaningful progress toward ending the conflict. Elevated oil prices have added pressure on the global economy by increasing concerns about inflation and higher energy costs.

Satoru Yoshida, a commodity analyst at Rakuten Securities, said WTI crude was likely to remain between $90 and $110 a barrel in the near term, continuing the pattern seen since late March.

Research firm Fitch Solutions, through its BMI unit, raised its 2026 Brent crude forecast to $90 a barrel from $81.50. The revision reflected continuing supply shortages, damage to Middle East energy infrastructure and the lengthy recovery period expected after the conflict.

Before the outbreak of war, around 20 percent of global energy supplies moved through the Strait of Hormuz. The conflict has removed an estimated 14 million barrels per day from global markets, including exports from Saudi Arabia, Iraq, the UAE and Kuwait.

The head of ADNOC said full oil flows through the Strait were unlikely to return before early 2027 even if fighting ended immediately.

Meanwhile, four sources told Reuters that seven major producers within the OPEC+ group are expected to approve a modest increase in July oil production when they meet on June 7, although supply disruptions linked to the Iran conflict continue to affect deliveries.