Global oil prices fell on Friday after reports that Iran has submitted a new proposal for negotiations with the United States, raising hopes of a possible diplomatic breakthrough. However, despite the daily drop, crude markets are still set to close the week with overall gains due to ongoing geopolitical tensions and supply disruptions.
Brent crude futures dropped by $1.62 to $108.78 per barrel, while West Texas Intermediate (WTI) fell $3.40 to $101.67. Earlier in the week, Brent had surged to $126.41, its highest level since early 2022, before retreating.
The decline followed news that Tehran sent its latest peace proposal to Pakistani mediators, sparking cautious optimism among traders that an “off-ramp” for the conflict might be emerging. Market analysts noted that even the possibility of dialogue helped ease some immediate risk pressure.
Still, supply concerns remain severe. The Strait of Hormuz, a vital route for nearly one-fifth of global oil and LNG shipments, remains effectively disrupted amid continued military tensions. The U.S. Navy is also blocking Iranian crude exports, keeping global supply tight.
Tensions escalated earlier when threats of retaliatory strikes and renewed military action briefly pushed prices higher. While a ceasefire has been in place since early April, mistrust between Washington and Tehran remains deep, and the future of the talks is uncertain.
