Oil prices fall on hopes of Middle East deal, but tensions simmer

Oil prices declined on Friday as traders weighed optimism about potential Iran-U.S. negotiations against ongoing Middle East tensions. Brent crude for August delivery fell 2.04% to $93.09 a barrel, while its U.S. counterpart, West Texas Intermediate (WTI) for July delivery, dropped 2.69% to $90.54.

Analysts noted that despite regional uncertainties, oil prices remain significantly below the peaks reached after late February attacks on Iran. This suggests the market is pricing in an imminent agreement that could allow for the resumption of oil flows through the Strait of Hormuz.

However, the situation remains volatile. The head of Hezbollah rejected a previously announced ceasefire in Lebanon, demanding a full Israeli withdrawal. Meanwhile, U.S. President Donald Trump indicated that talks could conclude this weekend. Iran claimed to have fired warning missiles at two U.S. ships in the Sea of Oman, a claim denied by Washington. The U.S. military also announced the seizure of an oil tanker in the Indian Ocean for allegedly transporting Iranian crude.