New York: Global oil prices stabilised at the end of a volatile trading week as hopes of renewed diplomatic engagement between the United States and Iran helped calm markets after days of heightened geopolitical tensions. Brent crude traded near USD 76 per barrel, while West Texas Intermediate (WTI) hovered below USD 72, following a sharp decline of more than two per cent in the previous session.
Although crude prices cooled, they remained on track for weekly gains as traders continued to assess the impact of disruptions to shipping through the Strait of Hormuz, one of the world’s most critical energy corridors.
Trump’s remarks lift hopes of diplomatic breakthrough
Oil prices eased after US President Donald Trump said that Iran had reached out with the intention of making a deal, raising expectations that diplomatic efforts between Washington and Tehran could resume.
According to media reports, Qatar and Pakistan are also working to facilitate talks between the two countries. A US official confirmed that technical-level discussions between Washington and Tehran are continuing and that the United States remains committed to pursuing a diplomatic solution.
However, uncertainty persists over the status of an earlier truce. While Trump stated that the agreement was effectively over, some provisions of the interim arrangement reportedly continue to be observed by both sides.
The mixed signals have left investors closely monitoring developments, with the oil market responding to every indication of progress or setbacks in diplomatic negotiations.
Strait of Hormuz remains under close watch
The Strait of Hormuz continues to dominate global energy market sentiment after recent military activity significantly disrupted shipping through the strategic waterway.
The latest escalation followed attacks on vessels in the strait, prompting US military strikes on Iranian targets over two days earlier this week. Iran subsequently responded by targeting American military bases in the region.
Despite the exchange of attacks, both countries have so far avoided a broader military conflict.
Shipping data indicated that vessel movements through the Strait of Hormuz slowed dramatically during the latest tensions, with observed transits nearly coming to a standstill by Thursday.
The disruption has once again highlighted the strategic importance of the narrow maritime passage, through which a significant share of the world’s crude oil exports passes every day.
Tanker movements show gradual improvement
Although shipping activity slowed considerably during the latest tensions, market participants noted signs of gradual improvement.
A number of oil tankers that had been delayed in the Persian Gulf have managed to depart in recent weeks, easing an earlier backlog of vessels waiting to transit the Strait of Hormuz.
Energy traders are now closely watching whether tanker traffic returns to normal levels in the coming days, as any prolonged disruption could tighten global crude supplies and place renewed upward pressure on oil prices.
Apart from shipping activity, investors are also monitoring production and export levels from major Gulf oil producers.
Saudi Arabia, the world’s largest crude oil exporter, is expected to announce its monthly crude allocation to customers shortly, a development that could provide further direction to global oil markets.
US says Strait remains open
The United States Central Command (CENTCOM) said Iran does not control the Strait of Hormuz and reiterated that American naval forces continue to ensure freedom of navigation in the region.
According to CENTCOM, US forces have assisted more than 800 vessels in safely transiting the waterway since May.
The statement is aimed at reassuring global markets and shipping companies that international maritime traffic continues to receive security support despite the heightened regional tensions.
Markets remain sensitive to geopolitical developments
The recent volatility underscores how quickly geopolitical developments can influence global energy markets.
Oil prices have fluctuated sharply over the past week as investors balanced concerns over supply disruptions with expectations that diplomatic engagement could prevent a wider conflict in the Middle East.
Analysts believe that future price movements will largely depend on three key factors: the progress of US-Iran negotiations, the resumption of normal shipping through the Strait of Hormuz, and production decisions by major oil-exporting nations.
For now, crude prices have stabilised, but the market remains highly sensitive to developments in the region. Any renewed escalation or breakthrough in diplomacy is likely to have an immediate impact on global oil prices in the days ahead.