Investing.com– Oil prices edged lower in Asian trading Friday as reports that the U.S. and Iran were exploring a phased deal to reopen the Strait of Hormuz tempered some supply concerns, although a Houthi missile attack on Saudi Arabia kept geopolitical risks elevated.

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As of 20:33 ET (00:33 GMT), Brent Oil Futures expiring in November fell 0.6% to $105.94 per barrel, while West Texas Intermediate (WTI) crude futures slipped 0.8% to $93.86 per barrel.

Both benchmarks had climbed as much as 5% during the previous session before paring gains on reports of the U.S.-Iran talks.

Saudi Arabia on Thursday said it intercepted six ballistic missiles fired by Yemen’s Iran-backed Houthis toward areas including Taif and the Yanbu region on the Red Sea.

The attacks revived concerns about Saudi oil infrastructure and export routes, particularly after earlier damage to the kingdom’s East-West pipeline disrupted crude shipments to Yanbu.

The security risks are especially significant because Yanbu is a major Red Sea export hub connected to Saudi Arabia’s eastern oil fields. Saudi Arabia has been increasing crude pumping toward Yanbu, but tanker loadings from the port had yet to fully resume.

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Meanwhile, reports showed that U.S. and Iranian negotiators in New York are exploring a phased path out of the conflict that would involve Tehran reopening the Strait of Hormuz in exchange for Washington lifting its economic blockade of Iran.

The strait has become a central bargaining chip, with both sides reluctant to surrender leverage before securing concessions from the other.

Reuters reported that only 17 commodity vessels crossed the strait over one recent weekend, compared with a pre-war average of about 125 vessels a day, although oil shipments have continued at reduced levels.

U.S. inventory data this week offered a counterweight to the geopolitical supply concerns. Commercial crude stocks rose by 3 million barrels in the week ended Sept. 18, versus analysts’ expectations for a 641,000-barrel draw, while gasoline inventories fell 1.7 million barrels and distillates declined 400,000 barrels.

Diesel markets also remained in focus after U.S. fuel prices climbed to record levels.