Oil falls on report Pakistan pushing for new U.S.-Iran talks

Oil prices fell on Friday on news that Pakistan is seeking a way to restart negotiations between the United States and Iran.

Brent crude futuresOil, the international benchmark, fell nearly 4% to close at $96.78 per barrel. WE West Texas Intermediate crude futures It lost 3% to $89.31 per barrel.

Pakistan’s efforts to renew US-Iran talks are supported by China, three sources told Reuters.

“The Chinese are unhappy because Iran’s attacks on other Gulf countries and the closure of the Strait of Hormuz hurt their interests,” a Pakistani government official told Reuters.

U.S. crude has gained nearly 8% this week, while Brent has gained nearly 10% as conflict in the Middle East has escalated sharply.

U.S. Central Command overnight completed its 13th consecutive nighttime strike against Iran, targeting military command centers, drone storage facilities, communications networks, coastal surveillance sites and maritime capabilities.

Centcom said the strikes were aimed at “further reducing the threat posed by Iran to civilian mariners and commercial ships passing through the Strait of Hormuz.”

The military unit said in a statement, “Despite the recent attacks by Iran’s Islamic Revolutionary Guard Corps, the international waterway remains open to passage. Commercial ships continue to navigate freely in the strait with US military support.” he said.

“More than 50,000 U.S. troops are currently operating in the Middle East.”

US President Donald Trump said axios He said on Thursday he was considering a “major attack” on Iran after the conflict in the Middle East expanded to a new battleground in the Red Sea. The president said the proposed strikes would be greater than anything seen so far in the war and that Iran “hasn’t suffered enough yet.”

“I’m thinking of a massive attack. Bigger than ever. I’m close to making a decision. We’re all ready for it,” he said in the interview.

This came after Trump said he would hold Iran responsible for further attacks by the Tehran-backed Houthis in Yemen after the militant group claimed to have hit two Saudi Arabian oil tankers in the Red Sea.

“If they do this again, the US will hold Iran responsible because the Houthis are proxies and/or proxies of Iran, and major military penalties will be imposed on Iran and of course the Houthis,” he said in an interview published on Truth Social. to mail.

Iran’s Revolutionary Guard said on Thursday that it had attacked US military facilities at an American base in Jordan, according to state media.

Speaking to reporters on Thursday, US Secretary of State Marco Rubio described Trump’s approach to the Iran war as “a tooth for an eye.”

Increasing instability on major shipping routes is creating a “major geopolitical risk premium” in oil markets, Capital.com senior market analyst Daniela Hathorn said in a note published Friday morning.

“Investor sentiment has weakened due to ongoing disruption in the Red Sea, where attacks on commercial ships have raised concerns about global trade and energy security,” he said. “These developments, combined with tensions around the Strait of Hormuz, have reinforced the view that geopolitical risks are unlikely to disappear any time soon, keeping energy markets tight and inflation risks high.”

Meanwhile, Giovanni Staunovo, a strategist at UBS Global Wealth Management, said in a note on Thursday that markets may be overestimating the oil market’s recovery after the conflict.

“We continue to expect the production recovery in the Middle East to be slower than the market expects as the number of ships arriving increases,” he said. “These flows remain under pressure as conflict continues. This should keep the oil market tight and support prices.”

UBS predicts Brent crude oil will fall to $85 per barrel by the end of the year.