Global oil prices retreated on Friday after reports that China is working to revive peace talks between the United States and Iran, easing immediate concerns over supply disruptions. However, crude benchmarks still recorded their strongest weekly gains in months as geopolitical tensions in the Middle East kept markets on edge.
Brent crude settled at $96.78 per barrel, down 3.88%, after closing above $100 in the previous session for the first time since May. U.S. benchmark West Texas Intermediate (WTI) fell 3.12% to $89.31 per barrel. Despite Friday’s decline, Brent gained nearly 10% for the week, while WTI advanced more than 8%.
Oil prices had surged earlier this week as hostilities between the U.S. and Iran intensified, disrupting tanker traffic through the Strait of Hormuz and raising fears over global crude supplies. Additional pressure came from Houthi attacks on commercial shipping in the Red Sea and reduced oil output from Kazakhstan following reported infrastructure disruptions.
Sentiment shifted after reports emerged that China has initiated a diplomatic effort to restart negotiations between Washington and Tehran, raising hopes of a potential de-escalation in the conflict. Analysts said the prospect of renewed talks prompted traders to lock in profits after this week’s sharp rally.
“There’s nothing this market loves more than hope,” said John Kilduff, partner at Again Capital, noting that even small signs of diplomatic progress are enough to trigger selling after a strong run-up in prices.
Market experts caution that volatility is likely to remain elevated as geopolitical risks continue to threaten key oil shipping routes. Any further disruptions in the Strait of Hormuz or the Red Sea could quickly reverse Friday’s losses and push crude prices higher again.
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