Brent crude settled at $76.01 a barrel on Friday, down 0.38 percent, while West Texas Intermediate lost 0.93 percent to $71.41, as markets absorbed President Donald Trump’s statement that the United States and Iran had agreed to resume peace talks even though the ceasefire was “over.” The decline trimmed but did not erase a week of sharp gains: Brent rose roughly 5–6 percent and WTI about 4–5 percent, driven by the most serious disruption to shipping through the Strait of Hormuz since the conflict began in late February.

The pullback was triggered by signals that Qatar and Pakistan were actively mediating a return to the negotiating table, and by Trump’s social-media post that Iran had requested continued dialogue. Viewed from London and Singapore, the diplomatic opening eased the immediate fear of a prolonged closure of the strait, through which roughly one-fifth of global oil and liquefied natural gas normally transits. Yet vessel-tracking data showed daily traffic remained severely depressed, with some tankers opting for routes close to the Iranian coast and war-risk insurance quotes being issued only hours before passage. Analysts at UBS noted that the absence of fresh US strikes on Iranian energy infrastructure also capped the upside, while Vanda Insights cautioned that the risk premium would persist as long as the strait’s status remained unresolved.

The International Energy Agency, in its monthly report, warned that the latest escalation could upend its forecast of a substantial supply surplus next year, calling a durable peace agreement a “necessary condition” for normalising oil flows. Regional exporters remain acutely exposed: Saudi Arabia can divert only a fraction of its crude via the Red Sea pipeline, the UAE’s pipeline to the Gulf of Oman lacks sufficient capacity, and Iraq, Kuwait, Qatar and Bahrain have no practical alternative to Hormuz. On the demand side, the IEA projected global consumption would decline by about 1 million barrels a day in 2026, the first annual drop since the pandemic, while US strategic reserves sit at their lowest since 1983, limiting Washington’s buffer.

The market’s near-term trajectory hinges on whether technical discussions, which US officials say are ongoing, can translate into a ceasefire that allows full resumption of tanker traffic. Citi analysts projected that a reopening of the strait could push Brent back toward $70 a barrel by the fourth quarter. Until then, the backwardation in futures curves—where spot barrels command a premium of more than $30 over contracts for 2028—signals that physical scarcity and geopolitical risk remain firmly priced in.