Oil prices stabilized on Friday as investors awaited news from high-stakes talks between the US and Iran in Oman amid concerns of a new Middle East conflict disrupting oil supplies.
Brent crude oil futures were down 5 cents, or 0.1%, at $67.50 per barrel by 12:11 GMT. West Texas Intermediate crude oil fell 11 cents, or 0.2%, to $63.18 per barrel.
Brent was scheduled to end the week down 4.6%. WTI was on track to end the week 3.2% lower.
“Investors are keeping an eye on the US-Iran talks and their sentiment will be shaped by the outcome,” said Tamas Varga, an oil analyst at brokerage PVM.
Investors remain nervous about geopolitical risks after Iran and the US failed to agree on the agenda for talks.
Iran wants to stick to the nuclear issue, but the US wants to discuss Iran’s ballistic missiles and support for regional armed groups.
Roughly a fifth of the world’s total consumption passes through the Strait of Hormuz between Oman and Iran, so rising tensions between the two countries could disrupt oil flows.
Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude oil through the strait, as does OPEC member Iran.
Oil prices could fall further if talks between the US and Iran ease the prospects for a regional conflict.
“We believe geopolitical concerns will give way to weak fundamentals,” analysts at Capital Economics said in a note, noting that a recovery in Kazakhstan’s oil production will help push prices toward $50 a barrel by the end of 2026.
Analysts said prices were weighed down on a weekly basis by widespread market declines and lingering expectations of an oil glut.
Saudi Arabia on Thursday cut the official selling price of Arab Light crude for Asia for March to the lowest price in nearly five years, marking the fourth straight month of price cuts.
“The underlying fundamental backdrop is not very encouraging and suggests an oversupplied market,” PVM’s Varga said.
(Reporting by Anna Hirtenstein in London; Additional reporting by Florence Tan and Sudarshan Varadhan in Singapore; Editing by Sonali Paul, Clarence Fernandes and Joe Bhavia)
