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- Rubio says more work needed in Iran talks despite some progress
- Iran, US maintain opposed on Tehran’s uranium, Strait of Hormuz
- OPEC+ expected to increase July oil output, sources say
- WTI, Brent headed for weekly losses
HOUSTON, May 22 (Reuters) – Oil prices climbed on Friday, as investors worried that the U.S. and Iran would be unable to reach a peace agreement that would allow shipping traffic to return to normal in the Strait of Hormuz.
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Brent crude futures settled at $103.54 a barrel, up 96 cents, or 0.94%. U.S. West Texas Intermediate futures finished at $96.60 a barrel, up 25 cents or 0.26%. Both had risen over 3% earlier in the session.
On a weekly basis, Brent was 5.48% lower and WTI was down by 8.37%, with prices volatile as expectations for a peace deal between Iran and the U.S. shifted.
“We have so many headlines back and forth, it’s hard to keep up,” said Phil Flynn, senior analyst with Price Futures Group. “The story now is Iran will deliver the uranium for the lifting of sanctions. But they keep changing the news before the ink is dry on the newspaper.”
A diplomatic source in Islamabad told Iran’s state news agency IRNA that Pakistan’s army chief had left for Iran. A senior Iranian source told Reuters earlier that gaps with the U.S. have narrowed, and U.S. Secretary of State Marco Rubio spoke of “some good signs” in talks.
“There’s been some progress. I wouldn’t exaggerate it. I wouldn’t diminish it,” Rubio told reporters after a NATO ministers’ meeting in Sweden. “There’s more work to be done,” he added. “We’re not there yet. I hope we get there.”
Rubio said the U.S. was in constant communication with the Pakistanis who are facilitating the talks with Iran.
The countries remained divided on Tehran’s uranium stockpile and controls on the Strait of Hormuz.
“I think we’re very much subject to the headlines,” said John Kilduff, partner with Again Capital. “We seem headed for a resolution, but the level of clarity is spectacular.”
Rubio also said the U.S. had not requested the assistance of NATO allies in reopening the strait.
Global oil inventories have been depleting at an alarming pace as oil flows via the Strait of Hormuz slow to a trickle, said PVM Oil Associates analyst Tamas Varga.
“The optimism of a relatively imminent truce and bearish rhetoric whenever Brent approaches $110 prevents oil prices from rallying significantly higher,” he said.
Separately, a Qatari negotiating team arrived in Tehran on Friday in coordination with the U.S. to help secure a deal, a source with knowledge of the matter told Reuters on Friday.
Six weeks into the fragile ceasefire in the U.S.-Israeli war with Iran, elevated oil prices have investors worried about inflation and the outlook for the global economy.
BMI, a unit of Fitch Solutions, has raised its average 2026 dated Brent price forecast to $90 from $81.50 to reflect the supply deficit, time required to repair damaged Gulf energy infrastructure, and a six- to eight-week post-conflict normalization window.
Around 20% of global energy supplies transited the strait before the war, which has removed 14 million barrels per day of oil – or 14% of global supply – from the market, including exports from Saudi Arabia, Iraq, the UAE and Kuwait.
Full oil flows through the strait will not return before the first or second quarter of 2027, even if the conflict ends now, the head of UAE state oil firm ADNOC said.
Seven leading OPEC+ oil-producing countries will likely agree to a modest hike to July output when they meet on June 7, four sources said, though delivery for several remains disrupted by the war.
Reporting by Erwin Seba in Houston, Seher Dareen in London, Yuka Obayashi and Sudarshan Varadhan; Editing by Jan Harvey, Alexander Smith, Emelia Sithole-Matarise and David Gregorio
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