Global Oil Prices Plummet Amid Hopes for Iran-US Ceasefire

New York. Crude oil prices in the international market have seen a significant decline this week. The drop on Friday was driven by positive sentiment surrounding upcoming talks between Iran and the United States aimed at establishing a permanent ceasefire.

Data indicates this is the largest weekly decline since 2022. The market reacted directly to a two-week ceasefire brokered by Pakistan between Iran and the U.S.

In Friday's trading, Brent crude prices fell by 0.8 percent to $95.20 per barrel. Overall, Brent crude prices dropped by 12.7 percent this week.

Similarly, U.S. West Texas Intermediate (WTI) prices fell by 1.3 percent to $96.57 per barrel. For WTI, this marks the largest weekly decline since the 2020 COVID-19 pandemic.

Despite the price drop, concerns regarding supply remain. Notably, oil shipments through the Strait of Hormuz remain more than 90 percent disrupted. Supply through this critical global route has not returned to normal as Tehran has warned that ships must operate only within its regional waters.

Following the peace agreement, Iran has proposed charging fees for ships passing through the waterway, a move that has drawn objections from Western nations and the United Nations.

The conflict, which began after U.S. and Israeli airstrikes on Iran on February 28, has caused extensive damage to energy infrastructure in the Middle East. Over 60 energy facilities have been targeted by drone and missile attacks.

Middle Eastern producers cut daily oil production by 7.5 million barrels in March, with estimates suggesting this figure could reach 9.1 million barrels in April. Analysts believe this could lead to a global oil shortage this year.

Meanwhile, Saudi Arabia's oil production capacity has decreased by 600,000 barrels per day, and its East-West pipeline shipments have also seen a sharp decline. On the other hand, the administration of U.S. President Donald Trump is preparing to continue exemptions for the purchase of sanctioned Russian oil. West Asian producers are already discussing plans to load oil with Asian refineries while awaiting the reopening of the waterways. It is expected that if next week's talks in Washington lead to a permanent ceasefire, oil prices will further stabilize.