U.S. crude futures rose slightly on Friday but were on track for their first weekly drop in seven weeks as supply concerns eased, and investors focused on the outcome of U.S.-Iran nuclear talks in Oman later in the day.
Brent crude futures rose 25 cents, or 0.4%, to $67.80 a barrel at 0353 GMT, while the U.S. West Texas Intermediate crude was also up 25 cents, or 0.4%, at $63.54 a barrel.
The benchmarks are down more than 3% from near six-month highs reached in late January when U.S. President Donald Trump threatened to strike Iran, with the two sides set to hold talks in Oman on Friday.
However, Tehran and Washington have not agreed on the agenda for the meeting. Iran wants to discuss only nuclear issues, while the U.S. is pressing to include Iran’s ballistic missiles, support for armed groups around the region and the treatment of its people.
“The two sides remain well apart, leaving tensions elevated. This should see the geopolitical risk premium remain in place,” Daniel Hynes, an analyst at ANZ, said in a note to Reuters on Friday.
Any escalation of tensions between the U.S. and Iran could disrupt oil flows, as about a fifth of the world’s total oil consumption passes through the Strait of Hormuz between Oman and Iran.
Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, as does their fellow OPEC member Iran.
If the U.S.-Iran talks ease the prospect of conflict in the region, oil prices could decline further.
“We think that geopolitical fears will give way to weak fundamentals,” Capital Economics analysts said in a note, pointing to a recovery in Kazakhstan’s oil output which will help push oil prices lower, towards $50 per barrel by end-2026.
