Oil prices fell on Friday after US President Donald Trump said Washington would not attack Iran before the November 3 midterm elections, easing fears of further disruptions to global energy supplies amid negotiations to end the conflict.
Brent crude futures fell $1.37, or 1.3%, to $102.91 a barrel by 0450 GMT, while US West Texas Intermediate (WTI) crude futures declined $1.09, or 1.2%, to $90.40, Reuters reported.
The decline followed a sharp rally on Thursday, when Brent settled about 4% higher as attacks on oil-shipping routes in the Middle East heightened concerns over supplies. Despite Friday’s retreat, Brent remained on course for a weekly gain, while WTI was headed for a slight weekly decline.
Trump said on Thursday that Washington was holding “productive discussions” with Tehran and that the United States would not launch an attack before the November elections. His comments followed reports that the administration had been considering military action against Iran.
The easing in prices reflects a shift in market expectations rather than a resolution of the conflict. Oil traders remain concerned about the security of shipments through the Strait of Hormuz, a critical route for global energy supplies.
Strait of Hormuz remains a major supply risk
Iran’s Tasnim news agency reported that Foreign Minister Abbas Araqchi said Tehran was reviewing the US response to an Iranian proposal to reopen the Strait of Hormuz within seven days.
Before the war, the strategic waterway carried shipments equivalent to about 20% of global oil and fuel supplies. Increased threats to shipping in the Gulf and the strait have contributed to sharp price swings in recent weeks.
Any sustained improvement in negotiations and maritime security could ease pressure on crude prices. However, analysts have cautioned that diplomatic statements alone are insufficient to guarantee a recovery in energy flows.
“The prospect of easing tensions still needs to be reinforced by concrete progress in negotiations and improvements in shipping safety through the Strait of Hormuz,” said Linh Tran, an analyst at XS.com.
Washington is continuing economic pressure on Tehran despite the diplomatic activity. The United States imposed fresh sanctions on Thursday targeting individuals, networks and 17 vessels accused of transporting Iranian crude oil, petroleum products and petrochemicals.
The combination of negotiations, sanctions and security threats has left markets sensitive to announcements from Washington and Tehran.
China fuel exports and US hurricane add to market uncertainty
Developments outside the Middle East are also influencing the outlook for energy prices.
China, the world’s largest oil importer, is expected to resume refined-fuel exports after a temporary halt during its Golden Week holiday. The move could ease tight supplies of diesel, gasoline and jet fuel in international markets.
The International Energy Agency has also agreed to accelerate the release of oil stocks under a plan launched in March, with priority given to diesel supplies.
Meanwhile, Hurricane Isaias is disrupting US oil production in the Gulf of Mexico. Producers had shut in about 1.3 million barrels per day, equivalent to 62.9% of current production in the affected area, as of Thursday, according to the US Marine Minerals Administration.
The disruption could support prices if production recovery is delayed, although the duration of the impact will depend on post-storm inspections and the speed at which facilities resume operations.
For India, a sustained decline in crude prices could ease the country’s import bill and reduce some inflationary pressure. However, Friday’s fall alone does not establish a lasting downward trend, particularly while Brent remains above $100 a barrel and geopolitical risks continue to threaten supplies.
The direction of prices will depend on whether US-Iran negotiations produce tangible progress, shipping through the Strait of Hormuz becomes safer and disrupted production and fuel exports recover.
For now, the market is balancing hopes of diplomatic de-escalation against continuing risks to global energy supplies.