Oil Prices Dip as Middle East Peace Hopes Grow Amid Iran-U.S. Talks

Global oil prices edged lower in early Friday trading as optimism surrounding a potential resolution to the Middle East conflict weighed on crude markets. A 10-day ceasefire between Lebanon and Israel taking effect, combined with signals from President Donald Trump that Washington and Tehran could meet for weekend negotiations, drove the cautious sentiment among traders.

Brent crude futures slipped to $98.05 per barrel, while U.S. West Texas Intermediate dropped to $93.40 per barrel — both retreating from recent highs but holding within the $90 range seen throughout the week.

At the core of ongoing diplomatic efforts is the prolonged closure of the Strait of Hormuz, a critical global energy corridor that has been blocked for seven weeks. The disruption has choked off roughly one-fifth of the world's oil supply, with ING analysts estimating approximately 13 million barrels per day affected. The bottleneck helped fuel a historic 50% surge in oil prices during March, briefly pushing Brent above the $100 per barrel threshold.

A breakthrough may be in sight. Trump confirmed Thursday that Iran had signaled a willingness to forgo nuclear weapons development for over 20 years, a major concession that could unlock a broader peace framework. "I think we're very close to making a deal with Iran," the president said outside the White House. However, U.S. and Iranian negotiators have reportedly scaled back ambitions for a comprehensive agreement, now targeting a temporary memorandum aimed at preventing renewed hostilities, according to Iranian sources cited by Reuters.

Israel's military operations in Lebanon have remained a persistent obstacle to peace, complicating Trump's efforts to broker a lasting ceasefire in the wider Iran conflict he and Israel launched in late February. Market participants are closely watching weekend developments, as any diplomatic progress could further ease supply concerns and push crude prices lower.