Global oil prices extended declines on Thursday, with Brent crude futures falling 0.4% to $87.50 a barrel by 00:29 ET, marking a fourth consecutive session of losses. West Texas Intermediate crude also declined 0.4% to $81.89 a barrel.
The declines followed reports of tentative diplomatic progress in the Middle East, where Iran and Oman reached an agreement on commercial shipping routes through the Strait of Hormuz. While Tehran suggested the deal may not immediately restore full transit, the move reduced supply disruption risks in a key chokepoint that previously handled roughly 20% of the world’s crude exports. Shipping data indicated flows through the strait remain significantly below pre-conflict levels.
Diplomatic signals emerged alongside broader regional developments. Iranian media cited progress toward a potential agreement that could bar military vessels from the strait, while local reports accused the U.S. of obstructing the deal with Oman. Separately, Russian state media reported a new ceasefire deal between Iran and the U.S. was imminent, though no official confirmation was provided. Pakistan also highlighted its role as a mediator in ongoing talks between Tehran and Washington.
Geopolitical tensions remained elevated elsewhere. Russia indicated plans to escalate attacks on Ukrainian infrastructure and Kyiv following stalled negotiations, while Ukraine targeted Russian energy and refining facilities in retaliation. U.S. CIA Director John Ratcliffe traveled to Moscow during the week for undisclosed discussions with Russian officials.
U.S. sanctions on Iran, imposed earlier in the week, added further pressure on the market by restricting trade flows. Analysts noted that while immediate supply risks appeared to ease, the broader geopolitical backdrop continued to pose upside risks to oil prices.
