\n By Myra P. Saefong and Nora Redmond <\/p>\n
\n Iran called Israel’s strikes on Lebanon “a blatant violation” of the cease-fire agreement. <\/p>\n
\n Oil prices finished lower on Friday, with U.S. and global benchmark crude contracts posting their worst weekly percentage losses in nearly six years, as talks loomed between the U.S. and Iran. <\/p>\n
\n That raised the possibility for an agreement that may lead to the recovery of shipping through the Strait of Hormuz. <\/p>\n
\n Read: What’s at stake for markets as the U.S. and Iran talk this weekend <\/p>\n
\n The path of oil prices will depend on the extent and speed of any recovery in traffic through the critical trade route through which one-fifth of the global oil supply normally flows, said strategists at Goldman Sachs Research. <\/p>\n
\n The strategists kept their fourth-quarter forecast for Brent oil unchanged at an average of $80 a barrel. That unchanged forecast assumes that the flow of traffic through the strait starts to pick up this weekend, followed by a gradual one-month recovery in Persian Gulf exports to per-war levels, said Daan Struyven, co-head of global commodities research at Goldman Sachs, in a Friday note. <\/p>\n
\n If the cease-fire doesn’t hold and the strait’s reopening is postpone for a month, Brent crude average $100 in the fourth quarter if oil production in the Persian Gulf fully recovers, he said. But if the reopening is delayed and there are “persistent” oil production losses in the region of 2 million barrels per day, Brent crude climb to as high as $115 in the fourth quarter, said Struyven. <\/p>\n
\n On Friday, Brent crude (BRN00) for June delivery (BRNM26) declined about 0.8% to finish at $95.20 a barrel to post a weekly loss of 12.7%. West Texas Intermediate crude (CL.1) saw its May contract (CLK26) fall 1.3% to settle at $96.57 a barrel, It was down 13.4% for the week, according to Dow Jones Market Data. <\/p>\n
\n Brent, as well as WTI, logged their biggest one-week percentage declines since the week ending April 24, 2020. <\/p>\n
\n A U.S. delegation led by Vice President J.D. Vance is set for talks with Iran in Islamabad, Pakistan, on Saturday, to end the conflict in the Middle East. A temporary two-week cease-fire was set to aid the negotiations; however, Israel’s continued attacks on Lebanon have jeopardized the truce. <\/p>\n
\n Tehran called the strikes “a blatant violation” of the agreement, while Israeli Prime Minister Benjamin Netanyahu has claimed that Lebanon was not a part of the cease-fire. Netanyahu said his government would hold talks with Lebanon focused on “disarming Hezbollah.” <\/p>\n
\n On Thursday, President Donald Trump confirmed in an interview with NBC News that Israel would be “scaling back” that military operation. “I spoke with Bibi and he’s going to low-key it,” he said, referring to Israeli Prime Minister Benjamin Netanyahu. “I just think we have to be sort of a little more low-key,” said Trump. <\/p>\n
\n In a post on Truth Social Friday, however, Trump said the “Iranians don’t seem to realize they have no cards, other than a short term extortion of the World by using International Waterways.” He said the only reason Iranians are alive today is to “negotiate!” <\/p>\n
\n Iran President Masoud Pezeshkian said discussions with Washington would be “meaningless” if bombs continued to fall on Lebanon during them. <\/p>\n
\n “With talks between Tehran and Washington set to get underway on Saturday, investors could be in for a fretful weekend as they wait for indications of whether a path to lasting peace is possible,” Dan Coatsworth, head of markets at AJ Bell, wrote in a note on Friday. <\/p>\n
\n Uncertainty remains about the future of the Strait of Hormuz and when exports of oil supplies will return to normal levels. Trump’s rhetoric on the war in Iran shifted throughout Thursday. He told NBC News that Iranian leaders are “much more reasonable” during meetings than when speaking to the press. But he also blasted the regime for its control of the strait. <\/p>\n
\n “Iran is doing a very poor job, dishonorable some would say, of allowing Oil to go through the Strait of Hormuz,” Trump wrote in a post on Truth Social. “That is not the agreement we have!” <\/p>\n
\n Front-month prices for Brent crude has fallen by nearly 20% month to date, but still trade roughly 34% higher so far this year. <\/p>\n
\n Read: Here’s how much money Iran can make charging tolls on one-fifth of the world’s seaborne oil <\/p>\n
\n -Myra P. Saefong -Nora Redmond <\/p>\n
\n This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. <\/p>\n
\n (END) Dow Jones Newswires<\/p>\n
\n 04-10-26 1608ET<\/p>\n
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