Oil extends decline ahead of US-Iran talks

Global oil prices fluctuated during trading sessions in Singapore on Friday, February 6, as market participants weighed a slight 1% recovery against a broader weekly decline triggered by optimism surrounding renewed U.S.-Iran negotiations. The anticipated diplomatic discussions between Washington and Tehran over the potential revival of the 2015 nuclear deal have significantly influenced market sentiment, as a successful outcome could lead to the removal of sanctions and the return of Iranian crude to the global export market. Despite the minor gains seen at the end of the week, crude oil benchmarks have been trending toward their first weekly loss in nearly eight weeks. This shift marks a notable break in the sustained price rally that has dominated the energy sector since the start of the year. Investors are increasingly pivoting from supply-side anxieties—which had previously pushed prices higher—toward a more cautious outlook as they await the specific results of the international talks scheduled for later in the day. The volatility reflects a delicate balance between persistent logistical constraints and the possibility of a substantial influx of supply from Iran. If an agreement is reached, Iran possesses the capacity to significantly boost global output, potentially providing much-needed relief to a tight market. However, until a formal resolution is announced, traders remain sensitive to every geopolitical signal coming from the negotiating table in Vienna and the policy updates issued by the U.S. State Department.