Oil prices extended their decline Friday as traders gave greater weight to negotiations between the United States and Iran that could eventually reopen the Strait of Hormuz more fully and reduce one of the largest geopolitical premiums in global energy markets.
Brent crude was trading around $103.64 a barrel at 12:12 p.m. EDT, down about 2.8%, while West Texas Intermediate was down roughly 3% at $91.75. That left Brent about 1% lower for the week and WTI down roughly 9%.
The decline materially advances the morning picture, when crude had fallen more modestly as investors initially assessed reports of negotiations.
U.S. and Iranian negotiators in New York are exploring a phased framework that could involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran. No final agreement has been announced, and the negotiations remain subject to change.
New shipping data also provided investors with a clearer picture of physical oil flows.
Preliminary Kpler tracking showed 33.7 million barrels of crude moved out of the Strait during the week beginning September 20. Nineteen tankers were involved, including 17 very large crude carriers, with Saudi Arabia accounting for most of the cargoes followed by Iraq.
That evidence matters because the Strait handled roughly one-fifth of global oil supplies before the Iran conflict.
The supply picture nevertheless remains fragile. Houthi attacks against Saudi Arabia continue, and Saudi, Turkish and Pakistani military officials are expected to discuss support for Riyadh as the kingdom confronts the attacks.
The divergence between international and U.S. crude has also become more pronounced. The Brent premium over WTI reached its widest level since May as the U.S. market separately priced the possibility of restrictions on diesel exports.
For markets, Friday’s session increasingly represents a contest between diplomatic de-escalation and persistent physical supply risk.
A verified agreement reopening Hormuz would have substantially larger implications than negotiating signals alone. Until that occurs, oil remains vulnerable to rapid repricing from both diplomatic announcements and additional attacks on regional energy infrastructure.
