Oil Swings Ahead of US-Iran Talks, Saudi Disruptions Hold Back Weakness
Oil prices fluctuated ahead of weekend talks between Iran and the United States, which are expected to determine the direction of a fragile ceasefire. Market participants tended to hold positions as the outcome of the meeting is seen as crucial for easing or even reviving the supply risk premium.
Brent traded near US$96 per barrel, but remained under pressure on a weekly basis, down around 12% and on track for its biggest correction since June. Market focus was on a meeting in Islamabad on Saturday, where US Vice President JD Vance was expected to lead discussions with Iranian officials.
On the supply side, Saudi Arabia stated that attacks on its energy infrastructure had restricted flows through the East-West pipeline used for exports via the Red Sea. The attacks cut production capacity by more than 600,000 barrels per day and reduced pipeline flows by around 700,000 barrels per day, reinforcing the perception that the risk of disruption remains real despite the ceasefire.
Another factor holding back normalization is traffic in the Strait of Hormuz, which is said to remain nearly at a standstill. The market views the recovery in shipping flows as the most direct indicator of whether the ceasefire can hold and pave the way for more permanent stabilization.
Comments from officials add to the dynamic: US President Donald Trump expressed “very optimism” about the deal, but also threatened Tehran over reports of tanker fees for transiting Hormuz. Meanwhile, Israeli Prime Minister Benjamin Netanyahu asserted that continued Israeli attacks were not part of the US-Iran ceasefire agreement, while Iran’s new supreme leader, Mojtaba Khamenei, stated that the management of Hormuz would be taken to a “new stage.”
Some analysts described the weekend meeting as difficult to predict, but the market is again focused on the reality of Hormuz flows, which are considered “still far from normal” and unlikely to recover quickly. With the combination of crucial talks, Saudi disruption, and Hormuz remaining unrecovered, price movements are expected to remain volatile in the near term. (gn)
Source: Newsmaker.id
