Oil Prices Record Sharp Weekly Decline on US-Iran Ceasefire Hopes

Global oil prices closed the week significantly lower as growing optimism over a possible ceasefire agreement between the United States and Iran eased fears of supply disruptions in the Middle East.

Brent crude, the international oil benchmark, settled at $91.29 per barrel, representing an 8.9 per cent decline from the previous week’s closing price of $100.21. Similarly, the US benchmark, West Texas Intermediate (WTI), fell 9.3 per cent to $87.60 per barrel from $96.60 recorded a week earlier.

The decline in crude prices gathered pace early in the week after indications emerged that diplomatic engagements between Washington and Tehran were making progress.

US Secretary of State Marco Rubio said negotiations between both countries were ongoing, noting that discussions aimed at restoring safe navigation through key regional waterways and initiating limited nuclear talks were advancing.

Market sentiment was further influenced by remarks from US President Donald Trump, who described the discussions as constructive and professionally conducted.

While expressing optimism about the negotiations, Trump maintained that existing naval restrictions would remain until a comprehensive agreement is concluded. He also reaffirmed Washington’s position that Iran must not develop nuclear weapons.

By the end of the week, reports suggested that both countries had prepared a framework for a 60-day extension of their ceasefire arrangement to allow further discussions on Iran’s nuclear programme and regional security concerns. The proposal, however, is still awaiting formal approval from the US president.

The prospect of a sustained truce has raised expectations that commercial shipping activities through the Strait of Hormuz — a critical route for global oil exports — could gradually return to normal operations. Nevertheless, vessel traffic remains below levels recorded before the conflict, leaving some geopolitical risk premium embedded in crude prices.

Some analysts believe that the market has increasingly factored in the likelihood of a diplomatic breakthrough. They noted that confirmation of a formal agreement and the reopening of the strategic waterway could limit further downside pressure on oil prices in the near term.

Beyond geopolitical developments, investors also assessed fresh economic data from the United States.

Recent inflation figures showed that price pressures remain persistent, with personal consumption expenditures inflation coming in above market expectations. The data reinforced speculation that the US Federal Reserve may maintain its tight monetary policy stance for longer than previously anticipated.

Higher interest rates typically slow economic activity and fuel consumption, raising concerns about future energy demand. Those concerns contributed to the bearish sentiment that weighed on crude prices throughout the week.