Oil prices were little changed on Friday after sharp declines the previous session. Prospects for a quick end to the U.S.-Iran conflict are dimming significantly. This follows the Hezbollah militia's rejection of a new ceasefire in Lebanon. Brent crude futures saw a small drop of 21 cents, settling at $95.24 a barrel. U.S. West Texas Intermediate crude also fell by 10 cents to $92.94 a barrel. Both oil benchmarks are poised for their first weekly gain in three weeks. This rise is due to renewed fighting in the Middle East and stalled peace talks. Traffic in the Strait of Hormuz, through which a fifth of global oil passes, remains restricted.
Analysts are concerned about falling oil inventories worldwide. This could lead to a price spike in the third quarter of 2026. Hezbollah leader Naim Qassem rejected a U.S.-brokered ceasefire agreement on Thursday. Iran has stated a ceasefire in Lebanon is a condition for any peace deal with Washington. U.S. President Donald Trump expressed optimism about progress between Israel and Lebanon. However, he acknowledged that any optimism is heavily clouded by conflicting news reports. The Organization of the Petroleum Exporting Countries (OPEC) is maintaining its oil demand growth forecast. They expect growth of 1.2 million barrels per day for 2026. This prediction holds despite the current Middle East conflict and the Strait of Hormuz closure. Iranian oil exports have dropped to their lowest level in six years. This is primarily due to the U.S. naval blockade and weak demand in China. These factors are depressing oil prices.