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US Oil Update: Crude Gains Amid Shifting Iran Peace Hopes

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Crude prices were headed for a weekly loss despite gains on Friday, as brief optimism for a Middle East breakthrough collapsed under rigid nuclear disputes between US and Iran.

Front-month West Texas Intermediate crude futures edged up by 0.1% to $96.47 per barrel, while Brent futures were up by 0.7% to $103.34/bbl.

However, both benchmarks were down for the week with Brent falling over 6% on a weekly basis so far while WTI dropped more than 8% so far this week.

Saxo Bank analysts noted that early hopes were supported by rhetoric out of Tehran indicating a fresh proposal from Washington had successfully narrowed historical differences pressuring prices earlier in the week.

However, the market quickly retraced those losses following aggressive counter-statements from Iran's Supreme Leader regarding the sovereignty of Tehran's nuclear assets, effectively clouding the near-term prospects for a comprehensive peace accord.

Compounding this nuclear gridlock is a highly controversial Iranian counter-proposal to implement a formal state-run tolling and transit fee system for commercial vessels navigating through the strategic Strait of Hormuz.

Speaking at an Environmental Protection Agency event at the White House on Thursday, US president Donald Trump rejected any permanent maritime taxing framework, reinforcing that the US views the chokepoint as an absolute free international waterway.

Experts warn that any formal tolling mechanism would set a highly destabilizing global precedent, threatening the free flow of maritime commerce across all international chokepoints.

"Should the blockade of the Strait of Hormuz continue for even longer-and that seems likely-stocks will continue to deplete," Commerzbank analysts said.

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