Dubai – Business News Report|| Oil prices fell at the close of Friday’s trading session, reflecting a market assessment of conflicting factors. Investors are weighing the possibility of a truce between the United States and Iran against the continued impact of Houthi attacks on Saudi Arabia.
Market Performance and Price Movements
Brent crude oil dropped by $2.28, or 2.14%, to settle at $104.32 per barrel. Despite the daily decline, Brent recorded a weekly gain of 1.5% since the start of the week. In contrast, US West Texas Intermediate (WTI) crude fell by $2.20, or 2.33%, to close at $92.41 per barrel, marking a weekly loss of 7.4%.
Diplomatic Efforts and Strategic Implications
The price divergence occurs as American and Iranian negotiators explore a gradual path to end the conflict in New York. Sources familiar with this week’s talks indicate the strategy involves Tehran reopening the Strait of Hormuz and Washington lifting the economic blockade imposed on Iran. This diplomatic push aims to stabilize global energy flows disrupted since late February.
Official Statements and Global Impact
Iranian President Masoud Pezeshkian stated on Thursday that the United States must decide when the war between the two countries ends. Since the outbreak of hostilities in late February, global shipments of oil and gas have fallen by approximately one-fifth. These significant reductions highlight the severe strain on international supply chains caused by the ongoing regional instability.
Analyst Perspectives on Market Resilience
Tim Waterer, chief analyst at KCM Trade, told Reuters that diplomatic hopes are primarily helping oil prices withstand military strikes in the Middle East. This sentiment was reflected earlier in the week when prices touched weekly highs, with both benchmarks rising by up to 5%. The current settlement reflects a cautious recalibration of these optimistic expectations.
Widening Price Spread Between Benchmarks
The price spread between the two benchmarks reached its highest level since May, standing at $12.50 per barrel. Typically, the two benchmark crudes move in parallel, with US crude trading at a discount to Brent. However, recent geopolitical tensions have widened this gap significantly beyond historical norms.
Concerns Over Diesel Export Restrictions
Significant behind the widening spread are fears that the United States might impose a ban on diesel exports. Such a measure could flood the domestic market, altering traditional pricing dynamics. Analysts note that while US crude usually trades at a discount, the current structural disconnect suggests deeper market fragmentation driven by policy uncertainties and supply chain disruptions.
This story was produced in the newsroom from the disclosed sources named above.
