Oil prices slipped on Friday as traders balanced fresh uncertainty over the Strait of Hormuz against escalating risks to Russian energy infrastructure. WTI crude was down 0.29% at $83.29 a barrel, while Brent crude fell 0.19% to $88.35 in early trade on August 28.
Brent had rebounded in the previous session, but the broader weekly trend remained weaker as markets assessed whether diplomatic efforts involving Iran could eventually improve crude flows through the key Middle East chokepoint.
Iranian officials have indicated that Tehran is preparing conditions for reopening the Strait of Hormuz after mediators asked it to outline its demands. Iran’s Supreme National Security Council secretary Mohsen Rezaei said Iran had agreed with Oman on a shipping corridor through the strait, but linked reopening to conditions including an end to the regional conflict.
A Guards spokesperson separately said the strait would not reopen unless Washington lifted what Tehran calls a blockade of Iranian ports, paid compensation and removed sanctions.
At the same time, the Russia-Ukraine conflict is creating fresh concerns over global refined fuel supplies. Reports that Russian President Vladimir Putin said talks with Ukraine had produced no results and that Moscow was preparing to intensify the war have shifted some market attention towards Eastern Europe.
Ukrainian strikes on Russian refineries and ports are disrupting energy infrastructure, potentially limiting Russia’s ability to export crude and refined products. The disruption comes as diesel markets are already showing signs of tightness.
Separately, Venezuela is examining a potential exit from OPEC, according to people familiar with the matter. While its diminished production means an immediate supply impact would likely be limited, a withdrawal could raise fresh questions over OPEC’s cohesion and its ability to influence global crude prices.
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