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(Bloomberg) -- Oil fell on tentative signs that talks between the US and Iran to reopen the world’s most important energy shipping route were progressing. West Texas Intermediate futures fell about 2.3% to settle near $92 a barrel, notching its first weekly drop since late August, as traders increasingly expect that the negotiations will be productive. The two countries were said to be pushing for a breakthrough that would see Tehran reopen the Strait of Hormuz and Washington lift its blockade of Iranian ports. Still, the warring sides have appeared close to a deal many times before, only for talks to collapse. Signs of tightness remain across markets for real-world barrels, and many traders were hesitant to shift their positions until they see a meaningful increase in supplies. A White House official said that President Donald Trump remained open to talking with Iran but stressed the US didn’t need to negotiate because it was in a strong position as a result of its sanctions campaign and the blockade. “A similar deal has been announced so many times before, and we have seen little traction on it,” said Emily Ashford, head of energy research at Standard Chartered Bank. “Plus, even if we saw some diplomatic breakthrough, that doesn’t immediately restore disrupted flows, doesn’t normalize shipping, or boost dwindling inventories, or improve confidence.” All week, crude prices have been buffeted by mixed signals on the outlook for peace, indications of a pick-up in Middle East flows and speculation that the US may ban diesel exports. For the year, Brent remains more than 70% higher, adding to inflationary pressures. While front-month futures retreated on Friday, some widely tracked metrics pointed to elevated concerns about near-term supplies. Among them, Brent’s prompt spread — the difference between its two nearest contracts — has widened to nearly $7 a barrel, from less than $1 at the end of last month. The bullish pattern, known as backwardation, is the hallmark of a tight market. Other signs include the record premiums traders paid on Thursday to secure prompt barrels at the main US crude-storage hub in Cushing, Oklahoma. In Europe, Dated Brent — a critical physical-market indicator — has been trading at a wide premium to futures. Some European refiners were told earlier this month they would be allocated no crude in October under long-term agreements with Saudi Arabia, after the kingdom’s East-West pipeline was shut because of attacks. “The physical markets suggest we have run out of oil, though I wonder if that signal is misleading,” said Scott Shelton, an energy specialist at TP ICAP Group Plc. There’s a chance the rally will fade once refiners receive their allotted barrels in coming days, he added. Persian Gulf suppliers have managed to slip crude through Hormuz, but risks to shipping remain. A cargo vessel was reportedly on fire and adrift after being struck by an unknown projectile earlier this week. Meanwhile, Saudi Arabia intercepted missiles fired toward the Red Sea port of Yanbu and the city of Taif on Thursday, as Iran-backed Houthi militants launched more strikes. In fuel markets, speculation continues to swirl over whether the White House will pursue an outright ban on diesel exports. Earlier, Bloomberg reported that Trump’s economic advisers are analyzing the ramifications of a potential short-term ban on the workhorse fuel. Market participants remain skeptical of such a move. While a potential ban would slash domestic prices for the fuel at the outset, traders and analysts say any relief is likely to be short-lived. To get Bloomberg’s Energy Daily newsletter in your inbox, click here. --With assistance from Bingyan Wang. More stories like this are available on bloomberg.com ©2026 Bloomberg L.P. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
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