LONDON: Oil prices dropped on Friday after Iran was reported to have sent a fresh proposal for US negotiations, but prices remained on track for weekly gains, with Tehran still blocking the Strait of Hormuz and the US Navy blocking exports of Iranian crude.
Brent crude futures for July were down 26 cents, or 0.2 percent, at $110.14 a barrel by 4:16 p.m. Saudi time. West Texas Intermediate futures lost $1.83, or 1.7 percent, to $103.24.
Iran sent its latest proposal for negotiations with the US to Pakistani mediators on Thursday, state news agency IRNA reported on Friday.
Still, the Brent benchmark was poised for a 4.2 percent gain over the week while WTI was on track to finish the week up 9.2 percent. Brent’s June contract hit $126.41 a barrel on Thursday, marking the highest level since March 2022, before ending the session down.
“Thursday’s sharp reversal underscores a market that is taking the stairs up but risks the elevator down on any sudden easing headline, making conditions exceptionally challenging for traders,” said Ole Hansen at Saxo Bank.
Oil prices have been on the rise since the US and Israel attacked Iran at the end of February, resulting in the closure of the Strait of Hormuz and the disruption of shipments of about a fifth of the world’s oil and liquefied natural gas supply. A ceasefire has been in place since April 8.
A senior UAE official said on Friday Tehran could not be trusted over any unilateral arrangements it makes for the Strait of Hormuz, in a sign of deep mistrust on all sides.
A senior official of Iran’s Revolutionary Guards had threatened on Thursday “long and painful strikes” on US positions if Washington renewed attacks on Iran, pushing oil prices to intraday peaks before retreating.
US President Donald Trump was scheduled to receive a briefing on Thursday on plans for a series of fresh military strikes on Iran to compel it to negotiate an end to the conflict, a US official told Reuters.
