Oil heads for a second consecutive weekly decline as Trump says U.S. no longer needs a deal with Iran.
Brent was heading towards a weekly decline of 2.4%, following a sharp 16% drop in the previous week. WTI was also set to lose another 2.5%, after tumbling 13% last week. Despite the recent pullback, Brent prices remain nearly 60% higher since the beginning of the year.
Market sentiment weakened after Trump stated in a Truth Social post on Thursday that the United States no longer required an agreement with Tehran. He argued that Washington had gained considerable financial leverage over Iran and established control over the Strait of Hormuz.
Trump also directed Vice President JD Vance to shift his focus towards domestic priorities rather than continuing negotiations with Iran, further undermining prospects for renewed diplomatic engagement. Meanwhile, Washington has signalled that its naval blockade of Iranian trade and oil shipments will remain in effect alongside existing economic sanctions.
The remarks came after a turbulent week in which initial optimism about a potential diplomatic breakthrough was overshadowed by renewed attacks on Saudi infrastructure by Yemen’s Iran-backed Houthis, as well as strikes targeting tankers transporting crude from the Gulf.
Security concerns across the Persian Gulf remain elevated. Risk consultancy Verisk Maplecroft reported 36 confirmed attacks on commercial vessels in the Persian Gulf, Strait of Hormuz and Gulf of Oman during October, marking the highest monthly number since the conflict began.
Iran has also maintained a firm stance on nuclear negotiations. The secretary of its Supreme National Security Council ruled out removing the country’s enriched nuclear material, while attacks on vessels east of the Strait of Hormuz have underscored the continuing threats to commercial shipping.
On the supply front, OPEC crude production rose by 1.96 million barrels per day to 27.16 million bpd in October, bringing output closer to the pre-war level of 28.63 million bpd recorded in February. Saudi Arabia accounted for much of the increase, lifting production to 10.56 million bpd from 8.37 million bpd in September.
However, ANZ analysts warned that the recovery in supply remains fragile, as restored production depends on alternative transportation and logistical arrangements rather than secure shipping routes. This leaves global oil markets vulnerable to further supply disruptions.
The bank also pointed to increasing threats to Russian energy supplies as Ukraine steps up attacks on the country’s oil infrastructure, introducing another source of uncertainty into an already vulnerable global supply outlook.
Despite persistent geopolitical tensions and risks to energy infrastructure, both major oil benchmarks are heading towards a second consecutive weekly decline. Investors remain focused on the possibility of renewed diplomatic negotiations, the restoration of stable shipping through the Strait of Hormuz and the pace at which Middle Eastern and Russian oil production can return to normal levels.
