Oil prices rose during Friday's Asian trade, although crude benchmarks remained on track for weekly losses as investors remained cautious about the prospects of a breakthrough in negotiations between the United States and Iran.
By 2:50 pm AEST (4:50 am GMT), Brent crude futures had risen $1.47, or 1.4%, to US$104.05 a barrel, while U.S. West Texas Intermediate crude futures gained $0.89, or 0.9%, to US$97.24 a barrel.
Despite Friday’s gains, Brent crude was down 4.7% for the week, while WTI had fallen 3.7%.
Analysts at ING said markets remained cautious given previous failed attempts to secure an agreement between Washington and Tehran.
“This is not the first time a deal seemed close, only for negotiations to break down. So, there’s a large segment of the market that will be more sceptical about the positive signals we are seeing,” ING analysts said in The Commodities Feed.
“While Iran said that the gap between demands has narrowed, there’s still the issue of its uranium enrichment -- as well as the uranium stockpile it is sitting on.”
A senior Iranian source told Reuters that differences between Tehran and Washington had narrowed, while U.S. Secretary of State Marco Rubio said there had been “some good signs” in negotiations.
However, the two countries remain divided over Iran’s uranium stockpile and Tehran’s control of the Strait of Hormuz, a key global energy shipping route.
Six weeks after a fragile ceasefire took effect, efforts to formally end the conflict have shown limited progress, while elevated oil prices have continued to fuel concerns over inflation and the broader global economic outlook.
Before the conflict escalated, around 20% of global energy supplies passed through the Strait of Hormuz. The war has since removed approximately 14 million barrels per day of oil from global markets, including exports from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.
The head of Abu Dhabi National Oil Company (ADNOC) said full oil flows through the Strait of Hormuz were unlikely to resume before the first or second quarter of 2027, even if hostilities ended immediately.
Meanwhile, four sources told Reuters that seven major OPEC+ producers are expected to approve a modest increase to July oil output when the group meets on 7 June, although supply disruptions linked to the Iran conflict continue to affect several producers.
