-- Crude oil futures declined in midday trading on Friday amid signs that US-Iran peace talks may resume as Iranian Foreign Minister Abbas Araghchi is expected to arrive in Pakistan for indirect talks with US officials.
Front-month West Texas Intermediate crude futures fell 2.40% to $93.53 per barrel, while Brent futures were down 0.45% to $104.56/bbl.
"Spot crude and product prices eased off the early-April highs on a combination of system rerouting and deal optimism," Ole R. Hvalbye, commodities analyst, said, adding that April Gulf output is reduced by 14.5 million b/d of pre-war supply.
President Trump will reportedly send US peace envoy Steve Witkoff and Jared Kushner to Pakistan for peace talks with Iranian officials, as Tehran sounded a pessimistic tone on the prospects for talks to end the Middle East conflict.
US officials are set to depart Saturday for talks this weekend, according to media reports.
Iranian officials, led by Araghchi, are also set to arrive in Pakistan on Friday, but haven't publicly agreed to sit down with Trump's representatives. No talks are scheduled between US and Iranian officials during the foreign minister's trip, according to media reports.
"Embarking on timely tour of Islamabad, Muscat, and Moscow. Purpose of my visits is to closely coordinate with our partners on bilateral matters and consult on regional developments," Araghchi said in a social media post on X.
Israel and Lebanon also agreed to extend their ceasefire by three weeks following a White House meeting with senior US officials, President Trump said on Thursday.
The latest diplomatic developments came as the US increased pressure on Iran with its naval blockade, seeking to get Tehran to agree to talks as the conflict has evolved into a naval standoff keeping the Strait of Hormuz closed.
Saxo Bank strategists said the disruption in the Hormuz threatens to further delay crude and fuel flows from the Arabian Gulf.
"Even a full reopening may still leave flows taking several months to normalize, creating additional tightness, especially in diesel and jet fuel, and forcing countries and companies to curb demand," the analysts said.
The Strait of Hormuz has come to a near halt as tensions between the US and Iran flared up over the strategic waterway this week, prolonging the global oil supply disruption.
MarineTraffic said Hormuz traffic remains constrained, with eight crossings recorded on Apr.23, flat day-over-day and far below typical volumes.
While no new attacks have occurred since April 22, risks remain elevated for the 702 vessels still in the Persian Gulf, amid threats of Iranian action, US interdiction and persistent mine hazards, the shipping tracking data firm said.
US Central Command posted on X Friday that the blockade against ships entering or exiting Iranian ports continues, with US forces redirecting 34 vessels so far.