Oil prices were little changed during Friday's Asian trade, remaining on track for a weekly decline after the United States and Iran agreed to extend nuclear negotiations, reducing immediate concerns over potential supply disruptions.
Investors are also watching an upcoming meeting of the OPEC+, where members may resume output increases.
By 3 pm AEDT (4 am GMT), Brent crude futures slipped 5 cents, or 0.1%, to $70.70 per barrel, while U.S. West Texas Intermediate crude was flat at $65.21 per barrel.
The U.S. and Iran held indirect discussions in Geneva on Thursday aimed at resolving their long-running nuclear dispute and averting conflict, after U.S. President Donald Trump ordered a military build-up in the region.
Oil prices initially rose by more than $1 a barrel following media reports that the talks had stalled. The sticking points reportedly included Washington’s demand that Tehran commit to zero uranium enrichment and transfer all 60% enriched uranium to the United States.
However, prices pared gains after Oman’s foreign minister, Sayyid Badr Albusaidi, said the two sides had made “significant progress”.
In a post on X after the Geneva meetings, he confirmed that negotiations would resume next week in Vienna with technical-level discussions.
The easing of immediate tensions helped calm fears of disruption to shipments through the Strait of Hormuz, a critical chokepoint for global oil flows.
ANZ analysts commented in a note to clients: "Oil supply could be anywhere between 10mb/d lower or 1mb/d higher than current levels, depending on the outcome of current peace talks. However, the Strait of Hormuz is the focus.
"Anything short of sustained disruption to oil supplies in that waterway would likely see only temporary rallies in the oil price. Any escalation of conflict is likely to see OPEC step in to calm the market.
"If supply disruptions emerge, we would expect OPEC to release spare capacity from Saudi Arabia, UAE and Kuwait/Iraq. Significant disruption would likely lead to inventory releases."
Separately, two sources told Reuters that Saudi Arabia is increasing oil production and exports as part of a contingency plan to cushion the impact of any potential strike.
Market participants are also looking ahead to the upcoming OPEC+ meeting on 1 March. The alliance of major producers, led by Organization of the Petroleum Exporting Countries and key partners including Russia, is expected to consider raising output by 137,000 barrels per day for April.
