Oil Swings as Traders Await Outcome of US-Iran Talks in Oman
(Bloomberg) — Oil rose as traders eyed the outcome of talks between Iran and the US, with Tehran signaling there wouldn’t be a quick resolution to tensions between the two sides.
Brent traded near $68 a barrel, following a 2.8% decline on Thursday. Prices swung to gains after Iranian media reported discussions would focus on “broad topics,” and it remains unclear whether the two sides can realistically bridge major differences. Futures pared some of those gains on the news that the talks were moving to a second round.
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The escalation in the Middle East, which provides about a third of the world’s crude, has added a risk premium to benchmark oil prices, overshadowing an outlook for oversupply. Still, futures in London are on track for their first weekly retreat since mid-December as the talks helped allay concerns over a conflict in the region.
On Friday, Iran’s state-run news agency said a first round of indirect talks in Oman focused on “managing the current situation” with the US and advancing negotiations. Oman said it held separate talks with US and Iran delegations to create the appropriate conditions for the resumption of diplomatic and technical negotiations.
“The tension is not going away,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “The standoff continues and Brent holds on to its risk premium.”
Meanwhile, in trilateral negotiations with the US, Ukraine and Russia agreed to exchange prisoners for the first time in five months as they sought to end their four-year conflict. Talks were making progress, with results expected “in the coming weeks,” Trump’s special envoy said.
Saudi Arabia cut prices for buyers in Asia by less than expected in a sign the kingdom has faith in demand for its barrels, although prices have still been reduced to the lowest since late-2020.
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