Oil pump and pipes ©Adobe Stock Images
Oil prices moved lower on Friday after US President Donald Trump indicated that Washington would not launch military strikes against Iran before November’s congressional midterm elections, easing some immediate concerns about further disruptions to Middle Eastern energy supplies.
Brent crude futures fell 72 cents, or 0.7%, to $103.53 per barrel by 02:20 GMT. US West Texas Intermediate (WTI) crude futures declined 52 cents, or 0.6%, to $90.97 per barrel.
Despite Friday’s retreat, Brent remained on course for a weekly gain following a 4% increase on Thursday, when renewed attacks on vessels transporting crude oil from the Middle East raised concerns about supply availability.
WTI, meanwhile, was heading for a modest weekly decline, even as Hurricane Isaias disrupted offshore oil production in the Gulf of Mexico.
Trump Signals No Immediate Military Action Against Iran
On Thursday, Trump said the United States was engaged in “productive discussions” with Iran and indicated that no military attack was planned before the November 3 congressional midterm elections.
His remarks followed media reports suggesting that Washington had been considering military action against Iranian targets ahead of the vote.
The comments reduced concerns about an immediate escalation of the conflict, which has continued for eight months and caused substantial disruption to regional energy markets.
Diplomatic developments also remained in focus after Iran’s Tasnim news agency reported that Foreign Minister Abbas Araqchi said Tehran was reviewing the US response to an Iranian proposal concerning the reopening of the Strait of Hormuz.
Under the proposal, the strategically important shipping route could reopen within seven days, although no final agreement was reported.
The Strait of Hormuz remains central to the oil market outlook because of its importance to global energy transportation.
Before the conflict, shipments passing through the waterway represented approximately 20% of global oil and fuel flows.
Increased threats to commercial vessels in the Gulf and the Strait of Hormuz during October have contributed to substantial fluctuations in crude prices.
Any sustained improvement in maritime security could help reduce transportation disruptions, although the timing and extent of a possible reopening remain uncertain.
US Announces Additional Sanctions on Iranian Energy Trade
Despite the diplomatic discussions, Washington continued to apply economic pressure on Tehran.
On Thursday, the United States introduced additional sanctions targeting individuals, commercial networks and 17 vessels involved in transporting Iranian crude oil, petroleum products and petrochemicals.
The measures form part of Washington’s efforts to pressure Iran as negotiations continue over ending the conflict.
The combination of diplomatic contacts and continued sanctions has left traders assessing the likelihood of a negotiated settlement alongside the potential for further restrictions on Iranian energy exports.
Hurricane Isaias Disrupts US Gulf Oil Production
Supply concerns were also influenced by Hurricane Isaias, which was approaching the US Gulf of Mexico coast.
Offshore producers suspended a substantial proportion of their operations as a precaution against the storm.
According to the US Marine Minerals Administration, approximately 1.3 million barrels per day of oil production had been shut in as of Thursday.
That represented 62.9% of current production in the affected offshore region.
The temporary closures added another source of uncertainty to global oil supply, although the duration of the disruption will depend on the storm’s path and the ability of operators to resume production safely.
The United States remains the world’s largest oil producer, making developments affecting Gulf of Mexico output relevant to international crude markets.
Oil Market Outlook Remains Sensitive to Supply Risks
Friday’s decline in crude prices reflected a moderation in immediate geopolitical concerns following Trump’s comments rather than a resolution of the broader supply disruptions.
Brent’s expected weekly increase illustrated the continued influence of maritime security risks in the Middle East, while the approaching hurricane added uncertainty to US production.
Traders will continue to assess diplomatic developments between Washington and Tehran, the status of shipping through the Strait of Hormuz, the impact of US sanctions and the recovery of offshore production in the Gulf of Mexico.
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