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Global crude oil prices settled higher on Friday, 6 February, reversing earlier losses as traders bet that high-stakes diplomatic talks between the US and Iran failed to de-escalate regional tensions. The lack of a breakthrough in Oman reignited fears of potential supply disruptions, prompting the market to price a geopolitical risk premium back into the curve. 

Brent crude futures settled at $68.05/barrel, up 50 cents or 0.74%. 

WTI crude settled at $63.55/barrel, up 26 cents or 0.41%. 

Intraday volatility reflected "status quo nervousness" as negotiators concluded discussions without a clear resolution. The diplomatic impasse centred on the meeting’s agenda—Tehran insisted on limiting the scope to nuclear issues while Washington pressed to include ballistic missile programs—leaving the market on edge regarding the safety of transit through the Strait of Hormuz. 

Bullish sentiment was further supported by supply-side tightening in Central Asia, where planned exports from Kazakhstan's giant Tengiz oilfield could plunge by 35% this month due to infrastructure fires. However, upside momentum was capped by demand signals from Saudi Arabia, which slashed its Official Selling Price (OSP) for Arab Light crude to Asia to a five-year low, signalling a continued battle for market share.

Written by: Aiman Haikal