PERTH: Oil prices edged lower Friday as hopes for a possible U.S.-Iran truce competed with fresh concerns over regional energy supplies following Houthi missile attacks on Saudi Arabia.
Brent crude futures fell 87 cents, or 0.82%, to $105.73 a barrel at 2:12 a.m. GMT, while West Texas Intermediate (WTI) dropped $1.56, or 1.65%, to $93.05. The declines came after both benchmarks surged as much as 5% during Thursday’s volatile session.
Brent settled 3.4% higher Thursday at $106.60 a barrel, its highest close since Sept. 15, while WTI gained 2.7% to $94.61. WTI had fallen about 13% over the previous six sessions before Thursday’s rebound.
The gap between Brent and WTI widened to $12.68, its largest level since May. Concerns that a possible U.S. ban on diesel exports could increase domestic supplies have contributed to the unusually wide spread between the two benchmarks.
“The unusually wide WTI-Brent spread also reflects the different regional risk profiles at play,” said Tim Waterer, chief analyst at KCM Trade.
Meanwhile, U.S. and Iranian negotiators in New York are exploring a phased path toward ending the conflict, according to sources familiar with the discussions. The proposed framework could involve Tehran reopening the Strait of Hormuz and Washington easing its economic restrictions on Iran.
The possibility of a diplomatic breakthrough has added downward pressure to prices, although traders remain cautious as attacks on energy infrastructure continue to threaten regional supplies.
Iranian President Masoud Pezeshkian said Thursday that the United States must decide whether to end the conflict.
“It’s America that must choose whether it wants to end this or not,” Pezeshkian said in an interview aired by Fox News.
Meanwhile, Saudi Arabia said it intercepted six ballistic missiles launched by Yemen’s Iran-backed Houthis, preventing attacks targeting Taif and the Yanbu area on the Red Sea, according to the Saudi-led coalition in Yemen.
The attacks have kept energy markets on edge, with analysts warning that critical oil infrastructure remains vulnerable to further strikes.
Saudi Arabia is also increasing crude flows through its East-West Pipeline toward the Red Sea export hub of Yanbu, although crude tanker loadings have yet to fully resume, according to industry sources, satellite imagery and shipping data.
The combination of diplomatic efforts and continuing security risks has left oil markets highly sensitive to developments in the U.S.-Iran conflict and the wider Middle East.
