Brent crude futures fell 72 cents, or 0.7%, to $103.53 a barrel by 0220 GMT, while US West Texas Intermediate declined 52 cents, or 0.6%, to $90.97. The declines followed a rise of approximately 4% in Brent prices during the previous session, when renewed attacks on vessels transporting crude from the region intensified supply concerns.
Market sentiment improved after US President Donald Trump said Washington would not attack Iran before next month's US midterm elections. His comments came as diplomatic discussions continued over efforts to end the conflict, which has disrupted energy markets and increased uncertainty for producers, traders and shipping operators.
The easing in prices reflected expectations that a reduction in military tensions could limit the risk of further interruptions to crude exports. However, the market remained exposed to developments around key maritime routes and the possibility that renewed hostilities could affect the movement of oil from major producing countries.
The difference between the day's early price decline and the previous session's increase illustrates the sensitivity of energy markets to geopolitical developments. Traders are balancing the possibility of diplomatic progress against the risk that shipping attacks, security threats or restrictions on transport could quickly tighten available supplies.
Higher oil prices have broader economic consequences because energy is a major input for transport, manufacturing, electricity generation and agricultural production. A sustained increase can raise operating costs for businesses and contribute to consumer inflation, complicating decisions for central banks already managing persistent price pressures.
For importing economies, renewed volatility could also increase pressure on trade balances and national currencies, particularly where governments rely heavily on imported petroleum products.
Despite Friday's decline, Brent remained above $100 a barrel, underlining the continuing risk premium attached to the conflict. Any lasting reduction in that premium will depend on whether diplomatic efforts produce a durable agreement and whether commercial shipping can operate without further disruption.
