Oil prices decline as US and Iran signal potential talks on Hormuz Strait

Global crude oil prices experienced a decline on Friday morning, interrupting a two-day rally, following statements regarding potential diplomatic progress between the United States and Iran. Brent crude fell by approximately 1% to 1.24% to reach $105.2–$105.4 per barrel, while West Texas Intermediate (WTI) dropped by 1.8% to 2% to trade between $92.7 and $92.9 per barrel.

The market shift follows reports of a potential phased agreement aimed at reopening the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi confirmed that Tehran has submitted a seven-day proposal to Washington in New York, following discussions on the sidelines of the UN General Assembly. Meanwhile, the Iranian President suggested that the responsibility for ending the conflict lies with the United States, raising market expectations for a de-escalation.

Despite Friday’s dip, oil prices remain under pressure due to concerns over inflation and the potential for successive interest rate hikes by the U.S. Federal Reserve. The recent surge in oil prices back above $100 per barrel has exacerbated economic anxieties, even as the U.S. dollar trends toward a weekly gain of roughly 1%. Future market stability remains contingent on the outcome of the proposed diplomatic talks and the evolution of security conditions in the Middle East.