Oil prices cooled on Friday after the US signalled progress in negotiations with Iran and postponed potential strikes on Iranian energy infrastructure by 10 days. Both major benchmarks declined by about 2% in early trade.
Brent crude, which had climbed as high as $108 per barrel, eased to $105.75, down 2.08% as of 7:50 am IST. US benchmark West Texas Intermediate (WTI) fell 1.94% to $92.67.
The pullback follows a sharp rally in the previous session, when Brent rose 4.8% to settle at $101.89 per barrel and WTI gained 4.6% to $94.48, driven by concerns over disruptions in the Strait of Hormuz. Prices remain significantly elevated compared to pre-war levels of around $70 per barrel.
Market sentiment shifted after US President Donald Trump said talks with Iran were progressing well, dismissing contrary reports. He also warned Iran to act quickly, stating that delays could lead to serious consequences.
Trump further announced a 10-day pause on potential strikes targeting Iran’s energy facilities, saying the decision was made at Tehran’s request as negotiations continue.
The Middle East conflict, now nearing one month since its onset on February 28, has tightened global oil supply flows and kept markets volatile. Iran’s increased control over the Strait of Hormuz—a critical oil transit route—has added to supply concerns.
Adding to the uncertainty, reports suggest Iran is considering imposing transit fees on vessels passing through the Strait. Lawmakers are reportedly drafting legislation that would require ships to pay for safe passage, potentially formalising Tehran’s control over the key waterway.
Meanwhile, Goldman Sachs expects Brent crude to average around $105 in March and rise to $115 in April, before easing to about $80 by the fourth quarter and stabilising at that level through 2027.
