Oil prices edged higher during Friday’s Asian session, recovering from early losses as investors assessed easing supply disruption concerns in the Middle East and turned their attention to United States-Iran nuclear talks in Oman later in the day.
By 3 pm AEDT (4 am GMT), Brent crude futures were up 16 cents, or 0.2%, at US$67.71 per barrel, while U.S. West Texas Intermediate crude rose 25 cents, or 0.4%, to $63.54 per barrel.
Both benchmarks settled 2.8% lower in the previous session.
Despite the modest rebound, both benchmarks are on track for their first weekly fall in more than a month and remain over 3% below the near six-month highs reached in late January, when U.S. President Donald Trump threatened military action against Iran.
Washington and Tehran are set to hold talks in Oman on Friday amid heightened regional tensions. The U.S. has increased its military presence in the Middle East, while regional players are seeking to avoid a confrontation that could escalate into a broader conflict.
ANZ analysts said in a note: "However, the two sides remain well apart, leaving tensions elevated. This should see the geopolitical risk premium remain in place."
The Strait of Hormuz remains a focal point for energy markets. Roughly one-fifth of global oil consumption passes through the narrow waterway between Oman and Iran.
Key OPEC producers, including Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, export most of their crude via the strait, as does Iran.
ANZ analysts added: "Traders are also following Ukraine peace talks this week. Those talks could be put on hold after Russia renewed attacks on Ukraine’s energy infrastructure this week."