Oil prices are on track to close the week below $110 per barrel after sharp swings in trading, driven by shifting geopolitical signals and supply-side developments.
Brent crude’s June contract briefly surged to $126 per barrel on Thursday before easing, as markets reacted to Iran’s proposal for renewed negotiations sent to the Trump administration through Pakistani mediators.
The move has cooled immediate concerns of escalation, though uncertainty remains.
Traders are also closely watching political developments in the United States, where questions linger over presidential war powers and whether recent tensions signal de-escalation or a temporary pause before further action.
In a related development, the US Treasury has warned shipping companies against paying any tolls for passage through the Strait of Hormuz, reflecting rising concerns over potential disruption in the key oil route.
Market sentiment has also been influenced by mixed supply outlooks.
OPEC+ members are expected to proceed with modest output increases for June, while Libya moves to expand exploration through a new partnership with Chevron.
At the same time, US Strategic Petroleum Reserve releases are adding extra supply to the market.
Elsewhere, developments in China, Brazil, Iraq, and Venezuela point to shifting global production and trade patterns, while renewed conflict-related risks and infrastructure concerns continue to add volatility.
Despite brief spikes, analysts say the overall trend this week reflects a market balancing easing geopolitical fears with ongoing uncertainty over future supply stability.
