Oil prices fell in early trade on Friday on optimism the Middle East conflict could be nearing an end after a 10-day ceasefire between Lebanon and Israel took effect and President Donald Trump said the U.S. and Iran may meet for talks on the weekend.
Brent crude futures declined by $1.34, or 1.35%, to $98.05 a barrel at 0021 GMT. U.S. West Texas Intermediate crude futures fell $1.65, or 1.74%, to $93.40 a barrel, trimming gains from the previous session.
Addressing a key sticking point in talks to end the Iran war, which has closed the Strait of Hormuz for seven weeks and choked off roughly one-fifth of the world’s oil supply, Trump said Tehran had offered not to possess nuclear weapons for more than 20 years.
“We’re going to see what happens. But I think we’re very close to making a deal with Iran,” Trump told reporters outside the White House on Thursday.
Oil prices climbed 50% in March in a record run and have only recently fallen below the $100 per barrel mark but have stayed within the $90 range for the week.
Israel’s campaign in Lebanon has been a major obstacle to securing a peace deal sought by Trump to end the war on Iran he launched with Israel in late February.
U.S. and Iranian negotiators have scaled back their expectations for a comprehensive peace deal and are instead seeking a temporary memorandum to prevent a return to conflict, two Iranian sources told Reuters on Thursday.
Analysts from ING estimate that roughly 13 million barrels per day of oil flow has been disrupted by the closure of the Strait.