Oil prices slipped on Friday as traders weighed the possibility of a ceasefire between the United States and Iran against fresh attacks on Saudi Arabia. The market remained cautious after a week of sharp price swings.
Brent crude fell 87 cents, or 0.82%, to $105.73 a barrel at 0212 GMT. US West Texas Intermediate (WTI) dropped $1.56, or 1.65%, to $93.05 a barrel.
The weaker opening followed a volatile session on Thursday. Both benchmarks climbed as much as 5% before giving back some gains. Brent eventually settled 3.4% higher, while WTI gained 2.7%.
Oil Market Remains Highly Volatile
Brent recorded its highest closing price since September 15 on Thursday. The gain also marked WTI’s first increase after six consecutive sessions of losses.
WTI had fallen about 13% over the previous six sessions. The US benchmark was also down 6.42% for the week, while Brent remained 2.09% higher.
The price gap between the two benchmarks has also widened significantly. Brent was trading $12.68 above WTI, marking the widest spread since May.
Analysts say concerns about a possible US ban on diesel exports have contributed to the unusual difference. Such a move could leave more diesel supplies inside the US and put additional pressure on domestic prices.
Tim Waterer, chief analyst at KCM Trade, said the unusually wide Brent-WTI spread also reflected different regional risks.
Possible Iran Truce Could Ease Supply Concerns
Markets are also watching diplomatic efforts between Washington and Tehran.
US and Iranian negotiators in New York are discussing a possible phased route out of the conflict, according to people familiar with the talks. The proposed arrangement could involve Iran reopening the Strait of Hormuz while Washington eases its economic restrictions on Tehran.
The Strait of Hormuz remains critical to global energy markets. A prolonged disruption could affect a significant share of international oil and gas shipments.
Since the conflict began at the end of February, around one-fifth of global oil and gas shipments have reportedly faced disruption. The supply concerns contributed to a sharp rise in oil prices during March.
Iranian President Masoud Pezeshkian said Thursday that Washington must decide whether it wants the war to end.
Speaking in an interview broadcast by Fox News, Pezeshkian said the United States had the choice over whether to bring the conflict to an end.
Saudi Oil Infrastructure Remains at Risk
Fresh attacks have added another layer of uncertainty for oil traders.
Saudi Arabia said it intercepted six ballistic missiles launched by Yemen’s Iran-backed Houthis. The missiles targeted areas including the southern province of Taif and the Yanbu region on the Red Sea, according to the Saudi-led coalition operating in Yemen.
The attacks have renewed concerns about the security of Saudi Arabia’s energy infrastructure.
Waterer said the latest attacks showed that critical oil assets remain vulnerable to further disruption.
Saudi Arabia is also increasing crude pumping through its East-West Pipeline. The pipeline carries oil toward Yanbu on the Red Sea, according to industry sources, satellite imagery and shipping data.
However, crude tanker loadings from the Red Sea export hub have yet to resume.
The combination of diplomatic efforts, disrupted energy flows and continuing attacks is keeping oil markets on edge. Traders are now watching both the negotiations with Iran and developments around Saudi energy infrastructure for signs of where prices could move next.
