Iran, Apr 02 : Global oil prices edged lower on Friday after Iran reportedly submitted a new proposal for negotiations with the United States through Pakistani mediators, easing some immediate concerns over further escalation in West Asia. However, the energy market remained highly volatile as traders continued to assess risks linked to disrupted shipping routes and the possibility of renewed military action.
Brent crude futures for July delivery slipped 26 cents, or 0.2 percent, to $110.14 per barrel during afternoon trading. U.S. West Texas Intermediate crude futures dropped $1.83, or 1.7 percent, to $103.24 per barrel.
Despite Friday’s decline, both benchmarks remained firmly positioned for strong weekly gains. Brent crude was heading for a rise of more than 4 percent for the week, while WTI was set for an increase exceeding 9 percent amid ongoing geopolitical tensions and supply concerns.
The market reaction followed reports by Iran’s state-run IRNA news agency that Tehran had conveyed a fresh proposal for discussions with Washington through Pakistani intermediaries. The development briefly improved sentiment among investors hoping for a diplomatic breakthrough after months of military confrontation and economic uncertainty.
Oil markets have witnessed extreme volatility since the United States and Israel launched strikes against Iranian targets earlier this year. The conflict led to major disruptions in maritime trade after Iran moved to restrict access through the Strait of Hormuz, one of the world’s most strategically important energy corridors.
The narrow waterway carries nearly one-fifth of global oil and liquefied natural gas shipments, making any disruption there a major concern for international energy markets. Although a ceasefire has remained in place since April 8, tensions have continued to simmer across the region.
On Thursday, Brent crude briefly surged to $126.41 per barrel, reaching its highest level since March 2022, after a senior commander in Iran’s Revolutionary Guards warned of “long and painful strikes” against American positions if new attacks were launched. Prices later retreated as traders locked in profits and reacted to diplomatic developments.
Market analysts said the sharp price swings highlighted growing uncertainty in global energy trading.
Ole Hansen of Saxo Bank said Thursday’s dramatic reversal reflected a market that was highly sensitive to geopolitical headlines, where prices could climb steadily but fall sharply on any sign of easing tensions.
Investors also monitored reports that U.S. President Donald Trump was expected to receive a briefing on plans for potential new military strikes designed to pressure Iran into broader negotiations over the regional conflict.
Meanwhile, officials from Gulf nations continued to express skepticism about Tehran’s intentions. A senior United Arab Emirates official stated on Friday that Iran could not be fully trusted regarding unilateral arrangements connected to navigation through the Strait of Hormuz, underscoring persistent mistrust between regional powers.
Energy analysts warned that although diplomatic communication channels appear to be reopening, the risk of renewed disruption remains high. Any escalation involving shipping routes, oil infrastructure or military assets in the Gulf could rapidly send crude prices higher again.
Financial markets are now closely watching whether the latest Iranian proposal leads to direct talks with Washington or merely serves as a temporary pause in the confrontation. Traders also remain focused on shipping activity in the Gulf region and potential responses from the United States and its allies.
The uncertainty surrounding Middle East tensions has already pushed transport and insurance costs sharply higher for oil shipments passing through the region, adding further pressure on global energy prices and inflation concerns in major economies.
With geopolitical risks still dominating market sentiment, analysts expect crude prices to remain highly volatile in the coming weeks as investors balance hopes for diplomacy against fears of another military escalation.