Crude oil prices extended their losses on Friday as investors reacted to signs of easing tensions between the United States and Iran. The decline followed reports that US President Donald Trump had called off planned military strikes against Iran, reducing immediate concerns about a broader conflict in the Middle East.
The retreat in oil prices came after several sessions of heightened volatility driven by geopolitical developments around the Strait of Hormuz, one of the world's most critical energy shipping routes. While supply concerns remain elevated, traders welcomed indications that diplomatic discussions may continue.
Brent crude futures fell US$1.21, or 1.3%, to US$89.17 per barrel during early trading. Meanwhile, US West Texas Intermediate (WTI) crude declined US$1.23, or 1.4%, to US$86.48 per barrel.
On a weekly basis, Brent crude was down 4.2%, while WTI crude recorded a decline of 4.4%, reflecting reduced geopolitical risk premiums following recent developments.
Oil markets reacted after President Donald Trump abandoned plans for military strikes against Iran despite earlier warnings that the country could face severe action. According to reports, the decision followed progress in discussions between Washington and Tehran.
However, uncertainty remains as Iran's semi-official Fars news agency reported that Tehran had not approved the text of any proposed agreement.
Despite the recent pullback in crude oil prices, concerns surrounding the Strait of Hormuz continue to provide underlying support to the market.
Earlier this week, Iran announced the closure of the strategic waterway and warned that vessels attempting to pass through could come under attack.
The strait typically handles around one-fifth of global oil and liquefied natural gas shipments, making it one of the most important energy transit routes in the world.
The prolonged disruption has heightened concerns about global energy supplies and contributed to the sharp rise in oil prices witnessed over recent months.
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While concerns remain elevated, the US military stated that commercial vessels continue to transit through the Strait of Hormuz.
The update helped ease some fears of a complete supply disruption, contributing to the latest decline in crude oil prices.
Investors will continue monitoring shipping activity in the region as any further restrictions could quickly reignite supply concerns and drive prices higher.
Although oil prices have corrected lower following Trump's decision, analysts believe the market remains vulnerable to further volatility. Geopolitical tensions in the Middle East continue to pose significant risks to global energy supplies.
Market participants are also watching whether diplomatic negotiations between the United States and Iran can produce a lasting agreement. Any setbacks in discussions could quickly reverse the recent decline in prices.
Crude oil prices moved lower after President Donald Trump cancelled planned strikes on Iran, easing immediate fears of military escalation. However, uncertainty surrounding negotiations and ongoing tensions around the Strait of Hormuz continue to support the broader market outlook. Investors are likely to remain cautious as they assess both diplomatic developments and potential supply risks in the coming weeks.
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Published on: Jun 12, 2026, 8:28 AM IST
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