Key Points
- Brent crude falls more than 1 per cent on Friday
- Weekly losses exceed 10 per cent amid easing Gulf tensions
- Traders remain cautious over Strait of Hormuz security risks
ISLAMABAD: Global oil prices declined sharply on Friday as hopes of a possible ceasefire extension between the United States and Iran reduced fears of prolonged supply disruptions in the Middle East.
Brent crude futures fell by around 1.3 per cent during the day to trade near $92.67 per barrel. Likewise, U.S. West Texas Intermediate (WTI) crude dropped nearly 1.4 per cent to about $87.64 per barrel.
Brent crude was down more than 10 per cent in a week, marking its steepest weekly decline since April
Similarly, WTI registered a weekly loss of nearly 9 per cent as traders unwound war-driven risk premiums.
The market retreat followed reports suggesting Washington and Tehran were moving closer to extending a ceasefire arrangement, if not a comprehensive peace deal.
The high hopes for peace, despite fresh strikes and tensions, outweighed the fears of renewed hostilities and further disruption.
Eased tensions around the Strait of Hormuz, one of the world’s most critical oil shipping routes, led oil prices to extend losses.
Oil prices had surged earlier this month after military exchanges between the United States and Iran.
The conflict had triggered fears of an extended and escalated war that could disrupt global crude supplies and tanker traffic through the Gulf.
Analysts said investors were now shifting focus from immediate supply fears toward diplomatic developments and the gradual normalisation of shipping activity in the region.
Despite the latest decline, energy markets remained volatile on Friday, with prices briefly rebounding during intraday trading after renewed security alerts near the Strait of Hormuz.
Shipping insurers and tanker operators also continued to warn that maritime risks in the Gulf remained elevated despite easing geopolitical tensions.
Meanwhile, reported expectations that Saudi Arabia may lower its July crude selling prices for Asian buyers added further downward pressure on the market amid weaker refining margins and softer Chinese demand.
