TLDR
- Brent crude jumped over 3% to $106 a barrel on Friday after a three-day decline
- U.S.-Iran peace talks are ongoing, with Pakistan acting as mediator
- Iran’s supreme leader reportedly directed that no enriched uranium leave the country, complicating talks
- The Strait of Hormuz remains effectively closed, keeping oil supply tight
- Goldman Sachs says global crude stockpiles are being drawn down at a record pace
Oil prices climbed sharply on Friday as traders tracked the latest developments in U.S.-Iran peace negotiations. Brent crude futures rose 3.3% to $106 a barrel, while West Texas Intermediate gained 2.9% to around $99 a barrel. Both contracts were still on track to post weekly losses.
The rebound came after three straight days of declines. Markets have been swinging back and forth as news from the talks shifts between hopeful and cautious.
The conflict between the U.S. and Iran began in late February, when the U.S. and Israel launched a joint military assault. The fighting has since spread across parts of the Middle East, including key oil-producing Gulf states.
Peace Talks Progress, But Key Hurdles Remain
Pakistan has been playing a central role as mediator. Iran’s foreign minister met with Pakistan’s Interior Minister Syed Mohsin Naqvi, who is working to build a framework to end the war.
Pakistan delivered the latest U.S. proposal to Iran two days before that meeting, according to Reuters.
U.S. Secretary of State Marco Rubio said the talks have shown “good signs” of progress. But he added he did not want to be “overly optimistic” and said he was waiting to see what happens over the next few days.
🔴 BREAKING: The final draft of a possible agreement between the United States and Iran, mediated by Pakistan, is expected to be announced within hours, according to Al Arabiya sources. Its key terms include the following:
🔴 Final draft of possible US-Iran agreement mediated by… pic.twitter.com/Fb0gTmv8nd
— Al Arabiya English (@AlArabiya_Eng) May 22, 2026
Iran’s foreign ministry said the latest U.S. proposal had “narrowed the gaps.” That language was cautiously received by oil markets.
But a major sticking point emerged Thursday. Reuters reported that Iran’s Supreme Leader Mojtaba Khamenei had issued a directive saying no enriched uranium should leave Iran. That directly contradicts one of President Trump’s key demands.
The White House pushed back on that report, with a source cited by Fox News calling it false.
Hormuz Closure Keeps Supply Tight
The Strait of Hormuz remains all but closed to tanker traffic. About one fifth of the world’s oil passes through the narrow waterway.
Iran and Oman have been in talks to set up a toll system for ships passing through the strait. Trump has opposed that arrangement.
ING analysts said uncertainty heading into the weekend leaves markets “susceptible to seesaw price moves” if fresh news emerges.
Goldman Sachs said global crude stockpiles are being drawn down at a record pace due to the war and supply disruption.
Commerzbank analysts warned that if no deal is reached and Hormuz stays restricted, stock levels will face increased scrutiny from markets.
The International Energy Agency said it is ready to release further emergency stockpiles if needed. It already made one release in March.
As of Friday, a ceasefire remained in place, but no formal peace deal had been reached. The conflict has lasted more than two months and continues to weigh on global energy markets.
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