WASHINGTON (dpa-AFX) - Partially reversing yesterday's surge, crude oil prices have edged lower on Friday even as U.S.-Iran diplomatic talks show no sign of resumption despite serious efforts by intermediaries, providing support to oil prices as U.S. rules out any planned negotiations.
The shift in stance by the U.S. to pressure Iran economically rather than by force dampened the risk premium for crude oil.
WTI Crude Oil for October month delivery was last seen trading down by $0.13 (or 0.16%) at $83.40 per barrel.
The Iran war is entering its seventh month and showing no signs of easing.
Citing preliminary data from Kpler, Reuters reported that on Thursday, seven commodity vessels transited the Strait of Hormuz, down from 17 on Wednesday and below the 10-day average of 15.
The alternate route to the Strait of Hormuz, the Bab el-Mandeb Strait saw 17 commodity vessels passing through it.
Vessels that switch off their transponders to avoid confrontation with Iranian military would not be counted.
Stressing that the U.S. naval blockade on Iranian ports is in full force and effect, White House Deputy Press Secretary Anna Kelly stated that there are no talks currently going on with Iran and none scheduled for any later date.
In an interview with Fox News, White House Press Secretary Karoline Leavitt stated that no negotiations are underway.
On Monday, the U.S. administration announced an expansive economic operation against Iran with an aim to block all sources of funding to completely and pressure the nation to reopen the Strait of Hormuz.
To make the embargo effective, the U.S. warned that any nation that attempts to offer a breather to Iran would also face the same consequences.
U.S. President Donald Trump has repeatedly expressed that the U.S. has no interest in returning to the terms of the ceasefire.
Today, the U.S. imposed additional targeted Iran-related sanctions. Iran called it 'state terrorism,'
Iran's Foreign Minister Abbas Araghchi posted through X that talks with the U.S. are possible if it builds trust and upholds its commitments and urged the U.S. to return to negotiations.
The effectiveness of the blockade, termed Operation Economic Outcast, is questioned by some energy experts.
Iran's biggest trade partner and major oil purchaser, China has merely commented that sanctions are not a productive way for bringing political change. Without China's cooperation, the operation cannot achieve its intended effects.
However, the change in the aggressive posturing by the U.S. administration has been welcomed by traders after Trump opted to squeeze Iran economically and paused plans for military strikes against the nation.
Despite the uncertainty prevailing over the reopening of the Strait of Hormuz, crude oil prices moved lower as the geopolitical risk premium due to a direct confrontation between the U.S. and Iran involving missile and drone attacks diminished.
On August 26, Iran's Islamic Revolutionary Guards Corps stated that along with a deal to jointly manage the Strait of Hormuz shipping traffic, it had reached a revenue-sharing arrangement with Oman. Further details are yet to be officially declared.
A Bloomberg report indicated that Venezuela is planning to exit the Organization of Petroleum Exporting Countries. The U.S. administration is reportedly planning to take a larger stake in Venezuela's oil fields. Traders assessed the possibility of a output hike from the South American oil producer.
Qatar and Pakistan have renewed their efforts to bring the U.S. and Iran again to the negotiating table but no big breakthrough news came through.
The U.S. dollar index was last seen trading at 99.71, up by 0.55 (or 0.55%) today.
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