Brent heads for more than 8% weekly loss as traders weigh US-Iran truce outlook

BENGALURU/LONDON: Brent crude steadied on Friday but held on track for a more than 8% weekly decline, as traders weighed up fading prospects for a lasting U.S.-Iran truce after talks were called off and Israel escalated attacks in Lebanon.

Brent crude futures were up 9 cents, or 0.1%, at $79.94 a barrel by 1226 GMT, but were heading for a second weekly decline.

The front-month July contract for U.S. West Texas Intermediate crude, which expires on Monday, rose 79 cents, or 1%, to $77.39 a barrel. The more actively traded August contract was up 26 cents at $76.11 a barrel.

Switzerland said U.S. talks with Iranian negotiators on a pact to end the Middle East conflict would not take place on Friday, as Vice President JD Vance dropped his travel plans, adding to uncertainty over the prospects for a lasting truce.

“It lays bare the rocky road that lies ahead to achieve a full and uninterrupted resumption of oil flow through the Strait,” said Tamas Varga, analyst at PVM Oil Associates.

“Undoubtedly, headlines around the extended ceasefire agreement will continue to shape sentiment.”

US vice president cancels trip for peace talks with Iran

Both benchmarks hit their lowest since the early days of the conflict on Thursday as several tankers, including three Saudi-flagged vessels carrying 6 million barrels of crude, sailed through the strait hours after the U.S. and Iranian presidents signed an interim deal to end their war.

Analysts expect the deal to release more than 85 million barrels of oil stranded in the Middle East Gulf into global markets. The agreement also includes the lifting of U.S. sanctions on Iranian oil, which would add more supply.

Around 20% of global oil and LNG supply transits Hormuz, but recovery in flows and production after the U.S.-Iran deal could take several months.

Citi said its base case, with a 60% probability, sees sustained normalisation in flows, with oil markets moving into surplus and prices trending lower over the next six to 12 months to around $60–$65 per barrel by the first quarter of 2027.

Commerzbank said oil supply should gradually recover, lowering its Brent forecast to $80 a barrel by year-end from $85, while expecting prices to remain above pre-war levels for most of the coming year.

Switzerland says US-Iran talks planned for Friday are off

Iraq’s oilfields are ready to resume production and output will gradually return to normal, restoring previous rates, Oil Minister Basim Mohammed said.

On the demand front, world demand will rise to 113.3 million bpd in 2030 from 105.1 million barrels per day in 2025, OPEC said in its 2026 World Oil Outlook.

However, Israel has continued its war against Hezbollah in Lebanon, raising questions about whether the U.S.-Iran peace agreement will hold.