Oil prices fell slightly on Friday after reports of a potential extension of a US-Iran ceasefire amid the ongoing Middle East conflict that has stretched beyond three months.Prices of Brent crude fell 0.37% to $93.36 a barrel, while US oil futures slipped 0.71% to $88.27 a barrel, as traders reacted to shifting signals around a possible de-escalation in the Strait of Hormuz crisis.Oil futures declined on hopes of a tentative deal between Washington and Tehran to extend the ceasefire, though comments from US Vice President JD Vance that the two sides were ‘close’ to reaching a deal but ‘not there yet’ kept prices from falling further, Reuters reported. Prices were down more than 8% for the week, with Brent hitting a low of $87.11 after touching a high of $109.47 last week, reflecting sharp volatility driven by conflicting signals over a potential end to the Iran war and prospects of reopening the strategic Strait of Hormuz.The Strait, which carries around one-fifth of global oil and LNG flows, has seen traffic fall sharply since the conflict escalated, with shipping activity now only a fraction of pre-war levels.Reports suggested the US and Iran had agreed in principle to extend their ceasefire by 60 days and ease restrictions on shipping through the strait, though the deal has not yet been formally approved by US President Donald Trump and has not been finalised by Iran, according to state-linked media and officials.Vance said Washington remained close to a breakthrough but acknowledged sticking points, particularly over Iran’s enriched uranium stockpile and enrichment levels. “We’re not there yet, but we’re very close and we’re going to keep on working at it,” he said.US Vice President added that the US could significantly set back Tehran’s nuclear programme, though he could not guarantee a deal.Market sentiment was further shaped by reports of renewed tensions on the ground, including US strikes on Iranian-linked targets and interceptions of drones and missiles in the Gulf region, underscoring the fragility of the ceasefire.Earlier, US Central Command said it had shot down multiple Iranian drones and struck a ground control station near Bandar Abbas, while Kuwait said it intercepted a ballistic missile targeting its territory. Iran’s Revolutionary Guard, meanwhile, warned of a ‘more decisive response’ if attacks continued.
