Oil Prices Moderated Week-on-Week on Easing Supply Risk
Oil prices were set for a mixed weekly performance on Friday as expectations for renewed US-Iran diplomacy eased some supply concerns, while uncertainty over the reopening of the Strait of Hormuz and disruptions to Middle East flows kept supply risks in focus.
International benchmark Brent crude futures for November delivery traded at $105.36 per barrel on Friday, up 1.4% from last Friday’s close of $103.87.
US benchmark West Texas Intermediate (WTI) crude futures for November delivery traded at $92.86 per barrel, down around 3.4% from $96.08 a week earlier.
Oil prices fell more than 2% at the start of the week as renewed efforts to resume US-Iran talks and a recovery in Saudi crude exports eased concerns over supply disruptions.
Qatar said it had been working with Tehran and Washington for nearly two weeks to help resume talks, while Qatar and Pakistan were mediating between the two sides.
At the same time, preliminary data cited by media showed Saudi crude exports had risen to more than 4 million barrels per day in September, from 2.4 million barrels per day in August, their lowest level since 2013.
The recovery in Saudi exports helped ease some supply concerns, although oil flows from the Middle East remained below normal levels.
Market attention shifted Tuesday as disruptions to Saudi oil exports and renewed fighting in Yemen raised concerns over regional supply routes.
The escalation added to fears that further disruptions could put additional pressure on energy flows from the Middle East, while prospects for US-Iran diplomacy limited the upward pressure on prices.
On Wednesday, oil prices came under renewed pressure as reports of US-Iran contacts in New York raised hopes of easing tensions. The partial restart of Saudi Arabia’s East-West Pipeline, which allows crude to reach the Red Sea port of Yanbu, also eased supply concerns.
The American Petroleum Institute’s estimate of an approximately 1.8 million barrels increase in US commercial crude inventories, compared with market expectations for a 500,000-barrel decline, added further downward pressure.
The downward trend reversed on Thursday as uncertainty over the reopening of the Strait of Hormuz and persistent regional security risks supported prices.
Iranian officials said Tehran remained open to diplomacy but had set conditions for reopening the strategic waterway. Iranian officials said Washington would need to meet seven conditions before the Strait could be reopened.
US Secretary of State Marco Rubio said the New York talks did not represent a breakthrough, though he described the meeting itself as significant.
Meanwhile, reports that flows through Saudi Arabia’s East-West Pipeline had resumed at low levels helped limit the upward pressure on prices.
Oil prices fell on Friday as Iranian President Masoud Pezeshkian signalled Tehran’s readiness to negotiate with Washington.
Iranian Foreign Minister Abbas Araghchi also said Tehran had proposed a seven-day plan to end the conflict, reopen the Strait of Hormuz, and restart nuclear negotiations, under certain conditions.
The diplomatic signals reduced some of the geopolitical risk premium in oil prices.
At the same time, improving US-China trade relations added to downward pressure on crude. Chinese President Xi Jinping said the two countries had agreed on a “new trade arrangement,” following talks aimed at extending an interim trade truce until January 2027.
With the Strait of Hormuz still not fully reopened and regional security risks unresolved, the oil market remains focused on whether diplomatic efforts can translate into a sustained easing of supply disruptions.
