Oil prices head for first weekly decline in almost two months ahead of US-Iran talks

Oil prices rose more than 1% on Friday after a sharp drop the day before, but are heading for their first weekly decline in almost two months, as supply concerns eased and investors focused on the upcoming US-Iran talks, UNN reports with reference to Reuters.

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Brent crude futures rose 78 cents, or 1.2%, to $68.33 a barrel by 06:58 GMT (08:58 Kyiv time), while US West Texas Intermediate crude rose 80 cents, or 1.3%, to $64.09 a barrel.

Nevertheless, Brent is expected to end the week down 3.3% and down 4.8% from late January highs, while WTI is heading for a weekly decline of 1.8% and a 3.4% drop from last month's nearly six-month high after US President Donald Trump's threats to strike Iran.

The lack of consensus on the agenda of the Iran-US meeting in Oman keeps investors' fears about geopolitical risks alive.

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Iran wants to focus on nuclear issues, while the US wants to discuss Iran's ballistic missiles and support for armed groups in the region.

"The parties remain far apart, leading to increased tensions," ANZ analyst Daniel Hynes noted in his note. "This should lead to the preservation of a geopolitical risk premium."

Any escalation of tensions between the two countries could disrupt oil supplies, as about a fifth of global consumption passes through the Strait of Hormuz between Oman and Iran.

Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq export most of their oil through the strait, as does Iran, an OPEC member.

If talks between the US and Iran ease the prospect of conflict in the region, oil prices could fall further.

"We believe that geopolitical concerns will give way to weak fundamentals," Capital Economics analysts noted in their note, pointing to the resumption of oil production in Kazakhstan, which will help lower prices to around $50 a barrel by the end of 2026.