West Texas Intermediate (WTI) crude oil prices remained steady below the $98.00 mark on Friday, trading near 10-day lows and heading for a nearly 4% weekly decline. This downward pressure is attributed to comments from US officials indicating some progress in peace negotiations with Iran, which have raised hopes for a negotiated end to the ongoing war. However, the market remains skeptical due to unresolved issues, particularly regarding Iran’s nuclear program and the status of the Strait of Hormuz, which continue to keep positions far apart [1].
Despite the recent pullback, WTI oil is still trading more than 30% above pre-war levels, as the blockade of the Strait of Hormuz nears its third month. This ongoing disruption has heightened concerns about a global oil shortage. The US Energy Information Administration (EIA) warned earlier in the week that its oil deficit projection is widening for 2026, with consumption expected to outpace production by 2.56 million barrels per day, potentially rising to 8.43 million barrels per day in the second quarter of 2026 [1].
Further complicating the outlook, The New York Times reported that Iran and Oman have engaged in talks to enforce a permanent toll on transit through the critical Hormuz waterway. Additionally, the CEO of the UAE’s state oil company cautioned that oil transit through the region would not return to normal until next year, even if the war were to end immediately. These factors suggest that while crude prices are currently under pressure, significant declines are likely to be limited unless there is a dramatic change in the geopolitical landscape [1].
CONCLUSION
WTI oil prices are under pressure due to tentative progress in US-Iran peace talks, but persistent supply risks and a widening projected oil deficit are keeping declines in check. The market remains cautious, with key geopolitical and supply uncertainties likely to limit further downside in crude prices.