US-Iran talks end without agreement, oil prices heading for a weekly decline
Oil prices are heading for a weekly decline as the US and Iran extended the nuclear talks. Oil prices rose on Friday but continued their weekly decline. This eases concerns about potential supply disruptions, while OPEC+ is considering a 137,000-barrel/day increase in oil production for April and may continue with the increase at its meeting on March 1.
Brent crude futures rose 36 cents, or 0.51%, to $71.11 a barrel as of 06:00 GMT, while WTI crude traded 38 cents, or 0.58%, at $65.59.
For the week, Brent was heading for a 1% decline, while WTI was set to fall around 1.3%, reversing some of the previous week's gains.
Traders are in a wait-and-see mode as the weekend approaches, due to rising tensions with Iran on one hand, and the OPEC+ meeting on Sunday, which is expected to result in a potential production increase, on the other.
Following Trump's military buildup in the region, the US and Iran held indirect talks in Geneva on Thursday to avoid a conflict over their long-standing nuclear dispute.
During the talks, oil prices rose by more than a dollar a barrel after media reports suggested the negotiations had stalled due to the US insistence on zero enrichment of uranium and the demand that all 60% enriched uranium be handed over to the US.
However, prices fell after an Omani mediator said both sides had made progress in the talks. Meanwhile, it was reported that technical-level talks are planned for Vienna next week.
The latest talks offer hope for a peaceful resolution, but given the past track record, military intervention is certainly not out of the question.
The tone of the talks suggests that both sides are unwilling to compromise, and the possibility of a US attack on Iran remains, although military action is likely to be limited.
One fact is that fears of disruption from Middle Eastern supply through the Strait of Hormuz, through which approximately 20% of global oil passes, due to a conflict, have added a geopolitical risk premium of $8 to $10 per barrel to oil prices.
Meanwhile, Saudi Arabia is increasing oil production and exports as part of a contingency plan to mitigate the impact of a potential strike.
Furthermore, according to sources, the OPEC+ group, comprising the Organization of Petroleum Exporting Countries and its allies, may consider increasing oil production by 137,000 barrels per day for April at its meeting on March 1, after suspending production increases in the first quarter.
Related Articles
Oil prices are rising as supply concerns increase amid expectations of a prolonged conflict in the Middle East
Oil prices continued to rise following US and Iranian attacks on ships serving their respective purposes
Oil prices closed higher this week following renewed US-Iran hostilities
