Oil prices drop as US-Iran nuclear talks progress, easing fears of supply disruptions and stabilizing energy markets amid diplomatic optimism

Oil prices experienced a decline on Friday, heading towards a weekly drop as the United States and Iran extended discussions regarding the OPEC member's nuclear program. This development eased concerns about potential hostilities that could disrupt supply.

Brent crude futures fell by 28 cents, or 0.4%, to $70.47 a barrel. West Texas Intermediate (WTI) futures decreased by 29 cents, or 0.44%, settling at $64.92.

For the week, Brent was on track for a 1.8% decrease, while WTI was set to fall around 2.2%. This marks a reversal of some of the gains seen in the previous week.

The United States and Iran held indirect talks in Geneva on Thursday concerning their long-standing nuclear dispute. These discussions aimed to avert conflict, particularly after U.S. President Donald Trump ordered a military build-up in the region.

During the talks, oil prices initially rose by more than a dollar a barrel. This surge followed media reports indicating that discussions had stalled over the U.S. insistence on zero uranium enrichment by Iran. A demand for the delivery of all 60% enriched uranium to the United States also contributed to the initial price increase.

However, prices eased after the Omani mediator announced that both sides had made progress in their talks.

The two parties plan to resume negotiations with technical-level discussions scheduled for next week in Vienna. Omani Foreign Minister Sayyid Badr Albusaidi shared this information in a post on X following the meetings in Geneva.

"While this initially allayed concerns of imminent U.S. military action, it leaves little time to reach a deal before President Trump’s deadline of 1–6 March," said Daniel Hynes, an analyst at ANZ.