Global oil prices edged lower in early trading on Friday as easing geopolitical tensions in the Middle East cooled supply fears that had driven prices to recent highs.
As at 07:16 AM (WAT), Brent crude traded at $98.29 per barrel, down 1.11%, while WTI crude stood at $93.31, declining by 1.46%.
The downward movement follows the implementation of a 10-day ceasefire between Israel and Lebanon, alongside fresh signals from the United States indicating a possible return to nuclear negotiations with Iran. The developments have reduced immediate concerns over supply disruptions, which had earlier pushed crude prices above $100 per barrel this week.
Market sentiment was further shaped by remarks from U.S. President Donald Trump, who suggested that Iran could return to negotiations and commit to halting nuclear weapons development.
While Iranian authorities have not formally confirmed the claims, officials at the United Nations say there is cautious optimism around renewed talks.
Despite the calm, the situation remains fragile. Reports of intermittent violations of the ceasefire agreement and continued military positioning in southern Lebanon have kept traders on edge, limiting the extent of price declines.
Attention is also on the Strait of Hormuz, a critical global oil transit route, where the U.S. has maintained a firm security posture. Any disruption in the corridor could quickly reverse current price trends, given its importance to global crude flows.
Industry analysts warn that while diplomatic progress may ease short-term volatility, structural supply risks persist. Even if a U.S.-Iran agreement materialises, it may not immediately resolve tight supply conditions in the global oil market.
For now, the market appears to be pricing in cautious optimism—balancing geopolitical relief against the ongoing risk of supply shocks.