Oil prices were mixed on Friday after follow-up talks between the United States and Iran in Switzerland were abruptly canceled, highlighting lingering uncertainty over efforts to turn an interim agreement into a permanent peace deal.
international benchmark brent crude oil August futures were last down 0.2% at $79.72 per barrel, erasing earlier gains, but the U.S. West Texas Intermediate Futures In July, it traded 0.1% higher at $76.68. Both contracts were scheduled to lose about 8% for the week.
The Swiss Foreign Ministry announced that talks between the United States and Iran scheduled for Friday in Burgenstock will not proceed as planned.
The White House also announced that Vice President J.D. Vance will no longer visit Switzerland, citing unresolved logistical issues surrounding the negotiations.
Vance announced Thursday that more than 12 million barrels of tankers had passed through the strait overnight.
“For the second night in a row, the Iranian side did not fire on any vessels in the Strait of Hormuz,” Vance told reporters. “So far, they have complied with their end of the bargain.”
Separately, OPEC Secretary General Haitham Al Ghaith told CNBC in an exclusive interview that OPEC does not expect oil demand to peak in the foreseeable future. He also dismissed International Energy Agency predictions of future oversupply.
“(We) focus on the fundamentals and don’t put too many ifs and buts into our predictions, but rather on the actual numbers,” he said.
Tamas Varga, an analyst at PVM Oil Associates, said on Friday that the conditional reopening of the strategically important Strait of Hormuz, Kuwait’s lifting of its force majeure declaration and the lifting of the U.S. naval blockade appeared to have convinced investors that the turmoil that had pushed prices above $120 was “completely and truly over.”
He added: “The 60-day ceasefire is definitely a welcome step in the right direction. However, even if the agreement holds, the recent decline may prove unsustainable in the short term.”
Tiago Lacerda, a market analyst at Axi, told CNBC in an email that oil prices are likely to remain between $75 and $82 per barrel in the near term, with Brent crude down about 36% from its peak during the conflict.
“With major shipping companies yet to resume shipping and insurance premiums remaining high, attention is quickly shifting to whether a physical restart will actually occur, suggesting that the market is cautious about the speed of normalization,” Lacerda said.
—CNBC’s Spencer Kimball contributed to this report.
