Oil prices fluctuated on Friday as cracks started to emerge in the preliminary deal between the United States and Iran to end the war.
Talks between officials representing the countries were postponed, with Vice President JD Vance delaying a scheduled trip to Switzerland for the next phase of negotiations and Israel launching new strikes in Lebanon, highlighting the fragility of the agreement signed this week. With the status of conditions in Strait of Hormuz unclear, shipping companies weighed whether it was safe to transit the waterway, a crucial passageway for oil and gas in the Persian Gulf.
Oil prices remain on track to fall for a second straight week, though, as traders react to apparent diplomatic breakthroughs, however tenuous, in recent days.
Oil fluctuates.
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The price of Brent crude, the global benchmark for oil, shifted between small gains and losses, trading at around $80 a barrel. After a series of declines, it is closer to prewar levels, but remains about 10 percent higher from the first days of the U.S.-Israeli strikes in late February.
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West Texas Intermediate crude, the U.S. benchmark, was similarly choppy, at around $76 a barrel.
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There is an abbreviated trading session on Friday, for the Juneteenth holiday in the United States.
Gasoline prices continue to fall.
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Gas prices dipped on Friday, falling a few pennies to a national average of $3.97 a gallon, according to the AAA motor club. The average gallon of gas fell below $4 on Thursday for the first time since the early days of the war.
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Gas prices don’t move in lock step with crude, usually trailing increases or drops by at least a few days.
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The average price of diesel slipped to $5.10 per gallon on Friday. It, like regular gas, remains more than 30 percent higher than before the war.
Stocks are subdued.
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Futures on the S&P 500 fell slightly, but volumes are low because U.S. markets are closed on Friday for the Juneteenth holiday.
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Stocks in Asia were mixed — Japan posted a small gain and South Korea a small loss — and markets across Europe posted small declines.
What they are saying: A ‘structural shift’ in the Strait of Hormuz
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The crisis in the Persian Gulf has resulted in a “a structural shift in what Hormuz passage means — commercially, legally and operationally,” noted Ana Subasic, a trade risk analyst at Kpler, a maritime data company.
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She wrote: “It has produced a passage environment where vessels may move, but their movements cannot always be trusted, verified or defended; where insurance coverage technically exists but its commercial terms may make transit economically irrational; where sanctions exposure can begin before a payment is made or a contract is signed; and where the most important risk indicators are not what diplomatic channels are saying but how vessels are actually behaving.”
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