Oil prices were little changed on Friday as investors closely monitored high-level talks between the United States and Iran in Oman, with markets weighing the risk of renewed Middle East tensions against weakening supply-demand fundamentals.
Brent crude slipped 5 cents, or 0.1%, to $67.50 a barrel, while U.S. West Texas Intermediate (WTI) edged down 11 cents, or 0.2%, to $63.18 a barrel. Despite the muted session, Brent is on track for a weekly decline of 4.6%, with WTI set to fall about 3.2%.
Market sentiment remains cautious amid uncertainty over the scope of the negotiations. Iran has indicated it wants discussions to focus on its nuclear programme, while the United States is pushing to include Iran’s ballistic missiles and its support for armed groups in the region.
“Investors are watching the U.S.-Iran talks closely, and sentiment will ultimately be shaped by their outcome,” said Tamas Varga, an analyst at PVM.
Any escalation could threaten oil flows through the Strait of Hormuz, a critical chokepoint through which around a fifth of global oil consumption passes. Several major producers, including Saudi Arabia, the United Arab Emirates, Kuwait, Iraq and Iran, rely on the route for exports.
Beyond geopolitics, oil prices have been pressured by expectations of oversupply and broader market weakness. Saudi Arabia this week cut its official selling price for Arab Light crude to Asia to near a five-year low, extending a run of monthly price reductions.
Analysts at Capital Economics said geopolitical risks may give way to softer fundamentals, pointing to recovering output in Kazakhstan that could push oil prices lower toward $50 per barrel by the end of 2026.