Oil prices rebounded slightly on Friday after steep losses earlier in the week but are poised for their first weekly decline in nearly two months, as easing supply concerns offset ongoing geopolitical risks. Brent crude rose 78 cents, or 1.2%, to $68.33 a barrel, while U.S. West Texas Intermediate (WTI) added 80 cents, or 1.3%, to $64.09 a barrel.
Despite the intraday gains, Brent is set to close the week down 3.3%, while WTI is on track for a 1.8% weekly decline. The drop follows a surge earlier in January amid heightened fears of a military confrontation between the U.S. and Iran, which threatened to disrupt oil flows from the Middle East.
Investors are closely watching talks in Oman, where Washington and Tehran are set to meet to discuss key issues, including Iran’s nuclear programme, ballistic missiles, and regional proxy activities. “The two sides remain far apart, keeping geopolitical tensions elevated,” said ANZ analyst Daniel Hynes.
Roughly 20% of global oil consumption passes through the Strait of Hormuz, underscoring the region’s strategic importance. Analysts say that if the talks reduce conflict risks, prices could decline further, with forecasts pointing to a possible drop toward $50 per barrel by the end of 2026 as supply conditions improve, including rising output from Kazakhstan.