Oil prices fell on Friday as concerns over Middle East supply disruptions eased after US President Donald Trump said Washington would not attack Iran before the US midterm elections on November 3, citing productive discussions with Tehran.
Brent crude futures fell 72 cents, or 0.7 per cent, to USD 103.53 a barrel by 0220 GMT. US West Texas Intermediate (WTI) crude futures declined 52 cents, or 0.6 per cent, to USD 90.97 a barrel.
However, Brent crude remained on track for weekly gains after settling 4 per cent higher on Thursday following an increase in attacks on shipping carrying crude oil out of the Middle East earlier this week.
WTI was headed for a slight weekly decline despite supply disruptions linked to a hurricane approaching the Gulf of Mexico coast in the United States, the world’s biggest oil producer.
Crude oil prices fall as Trump rules out Iran attack
Oil prices declined after Trump dismissed reports of possible fresh strikes against Iran and said the United States would not attack the country before the November 3 midterm elections.
In a post on Truth Social, Trump said productive discussions were underway with Iran. He also said the blockade on Iranian maritime traffic in the Strait of Hormuz would remain in place.
Trump said oil was flowing through the strategic waterway in record volumes, claiming that 22 million barrels had moved through the Strait of Hormuz the previous night, with no Iranian oil involved.
“We are having productive discussions with the Islamic Republic of Iran,” Trump said. He added that the United States would not attack Iran before the midterm elections and reiterated that Tehran would not be allowed to possess a nuclear weapon.
The statement came a day after reports that the Pentagon had been instructed to prepare for a possible resumption of major combat operations against Iran. The preparations were reportedly being considered ahead of the US midterm elections.
Trump’s latest remarks ruled out an attack before the elections, while indicating that discussions with Iran were continuing.
Brent crude set for weekly gains after Thursday’s rally
Despite Friday’s decline, Brent crude futures remained on track for weekly gains after prices settled 4 per cent higher on Thursday.
The increase followed a rise in attacks on shipping carrying crude oil out of the Middle East earlier in the week, raising concerns about supply disruptions.
Brent crude was trading at USD 103.53 a barrel on Friday, down 0.7 per cent, while the latest market data put the price at USD 103.198, down 1.04 per cent.
WTI crude futures fell 0.6 per cent to USD 90.97 a barrel by 0220 GMT. The US benchmark was set for a slight weekly decline. WTI prices remained under pressure even as supply disruptions were reported due to a hurricane approaching the Gulf of Mexico coast.
The contrasting weekly trends in Brent and WTI came amid developments involving Middle East oil shipments, the US-Iran conflict and potential disruptions to crude production in the United States.
Strait of Hormuz blockade remains in place
Trump said the blockade on Iranian maritime traffic through the Strait of Hormuz would continue despite ongoing discussions with Tehran.
The waterway is central to the current supply concerns, with attacks on shipping carrying crude oil out of the Middle East contributing to Thursday’s increase in Brent prices.
Trump claimed that oil was continuing to flow through the Strait of Hormuz in record volumes, with 22 million barrels moving through the waterway the previous night. He said none of the oil was coming from or going to Iran.
The US president also reiterated Washington’s position that Iran would not be allowed to possess a nuclear weapon.
Trump’s remarks came amid uncertainty over whether the United States would resume major combat operations against Iran. According to foreign media reports quoted by ANI, the Pentagon had been instructed several days earlier to complete preparations for possible renewed military operations.
The reported directive did not specify a date for any potential strikes. US and Israeli officials cited in the reports said renewed combat operations could take place before the US midterm elections.
Trump subsequently said no attack would take place before November 3, while maintaining that the blockade would remain in force.
Iran says response to US peace proposal expected in coming days
Iranian Foreign Minister Seyyed Abbas Araghchi said Tehran would respond to a US peace proposal within the next few days, indicating that negotiations between the two countries were continuing.
“The negotiation process is still ongoing, and messages are being exchanged through mediators,” Araghchi said, according to Iranian state media. He said Iran had already presented its proposal, called the “Seven-Day Plan”, and had received the US side’s views on it.
“We presented our plan, which we had presented under the title ‘Seven-Day Plan’, and we also heard the American side’s views on it,” Araghchi said. He added that Tehran was reviewing Washington’s views and expected to provide its response within the next few days.
The diplomatic exchanges are linked to Iran’s proposal to reopen the Strait of Hormuz under the seven-day plan, which Araghchi presented last month during the 81st United Nations General Assembly.
Araghchi said the timeline would begin once the United States accepted the proposal. He also said Washington would need to take certain steps under the plan, which could be completed within four to five days.
Iran’s seven-day plan proposes reopening of Hormuz
Under Iran’s proposal, the Strait of Hormuz could be reopened on the sixth day if the United States fulfilled the required conditions. Talks between Tehran and Washington would then resume on the seventh day. Araghchi said the required steps were included in a memorandum of understanding and would not be difficult to implement.
“If they accept this plan tomorrow, the seven days will start from tomorrow,” he said.
The proposal comes amid continued uncertainty over the future of US-Iran negotiations and the status of shipping through the Strait of Hormuz. Trump had earlier rejected the proposed arrangement, according to foreign media reports quoted by ANI.
