By: Economy Middle east

Oil prices edged higher on Friday, although both benchmarks remained set for weekly declines amid investor skepticism over the likelihood of progress in U.S.-Iran peace negotiations.

As of 7:00 GMT, Brent crude futures gained $2.65, or 2.58 percent, to $105.2 a barrel, while U.S. West Texas Intermediate crude rose $1.96, or 2.03 percent, to $98.31 a barrel.

Despite Friday’s rebound, Brent was headed for a weekly drop of 3.93 percent, while WTI was on course to lose 6.93 percent, as oil markets swung sharply throughout the week in response to changing expectations surrounding a potential peace agreement.

Oil prices remain supported by Hormuz closure

Optimistic remarks from U.S. officials regarding peace negotiations with Iran left oil prices headed for steep weekly losses. Still, crude prices remained relatively supported as the Strait of Hormuz stayed shut, while Washington and Tehran continued to disagree on major issues, particularly Iran’s nuclear program.

Earlier this week, President Donald Trump said he had delayed a planned military strike on Iran and pointed to progress in ongoing talks between the two countries. His comments weighed heavily on oil markets, with investors increasingly anticipating an end to the Iran conflict.

Trump later stated that the war with Iran was entering its final phase. Separately, Iran said it was reviewing the latest U.S. proposal for a peace agreement. Media reports on Thursday indicated that Washington and Tehran had finalized a draft peace deal, although neither side officially confirmed the reports.

Divides between Washington and Tehran persist

Oil shipments through the Strait of Hormuz remained limited, continuing to strain global supply levels. Iran was also reportedly considering imposing transit fees on vessels passing through Hormuz, a proposal that U.S. officials have largely dismissed.

Washington and Tehran remained divided over Iran’s uranium reserves and its intentions regarding control of the Strait of Hormuz. Trump reiterated on Thursday that Iran’s uranium stockpile must be secured, maintaining that Tehran cannot be permitted to develop a nuclear weapon. Trump also warned that he was prepared to authorize military strikes on Iran if ongoing negotiations failed to produce meaningful progress.

Despite this week’s decline in oil prices, crude was still trading roughly 50 to 70 percent higher overall, as disruptions in the Strait of Hormuz removed nearly one-fifth of global oil supplies from the market. Asian economies were among the hardest hit by the Hormuz disruption, while the U.S. was seen increasing its exports to help offset the supply shortfall.

Earlier this week, Washington extended a sanctions waiver on seaborne Russian oil in an effort to ease ongoing supply pressures.