(Bloomberg) — Oil fell sharply in light trade on signs that Iran has presented a new proposal to the US to end the conflict that has roiled global markets, prompting traders to scale back risks ahead of the weekend.
Read more from Bloomberg
West Texas Intermediate fell as much as 5.5% to trade near $99 a barrel as talks between the US and Iran continued. Traders are also dissecting headlines for details on Iran’s response to its nuclear ambitions and the fate of the Strait of Hormuz.
Hormuz has become a hotbed of conflict, with Iran and the US signaling that they will wait for the other to go first before agreeing to ease traffic restrictions along the key oil and liquefied natural gas route.
Tehran conveyed its latest position to Washington through Pakistan, which mediated the first round of direct talks last month, Iran’s state-run Islamic Republic News Agency said, without elaborating on its contents. Oil is down and other headlines from the Middle East indicate that nuclear talks may be on the table.
Futures firmed earlier as US President Donald Trump said he was sticking to the Iranian naval embargo and was told of other options for war.
WTI was on track for a weekly gain of around 11%. The increase reflects the unresolved conflict and the blockade of oil exports from the Persian Gulf.
“The market has started to wake up to the fact that it may be a long time before oil starts flowing again,” said Jens Naervig Pedersen, strategist at Danske Bank AS. “That will further deplete storage. Higher prices are needed to create enough demand destruction to balance the market.”
Chief Executive Officer of Chevron Corp. Mike Wirth told CNBC in an interview that the company is concerned about global oil consumption, and the threat of fuel demand.
“The world’s energy system continues to be under great stress,” said Wirth.
Oil briefly rose to a four-year high on Thursday as a standoff in talks extended the complete closure of the Strait of Hormuz. Iran’s Supreme Leader Mojtaba Khamenei cast doubt Thursday on the chances of a deal with the US, vowed not to give up the Islamic Republic’s nuclear or missile technology, and signaled that Tehran would retain control of the Strait of Hormuz.
Uncertainty about future supply has seen sharp price volatility, reducing trading volumes. Markets are closed in many countries – including China, Singapore, Germany, France and Brazil – on Labor Day.
Meanwhile, Japan’s top monetary official said Tokyo authorities are ready to intervene in the crude oil market, where speculation has been weighing on the currency. Japan entered currency markets on Thursday to buy the yen, according to a person familiar with the matter, matching the biggest decline in the Bloomberg Dollar Spot Index since January.
–Courtesy of Charles Gorrivan and Sarah Chen.
Best Reads in Bloomberg Businessweek
©2026 Bloomberg LP
