The EU warns that the U.S./Iran war will driver inflation to 3.1 percent: File Image/Pixabay

With doubt mounting that the U.S. and Iran will agree to any peace proposals despite protracted talks between the two countries, oil on Friday recorded another round of gains, but the anticipation of an end to hostilities in earlier sessions explained why the commodity was headed towards a weekly loss.

Weekly, Brent was 5 percent lower and West Texas Intermediate shed over 8 percent.

For Friday, as of 1653 GMT, Brent was up 82 cents at $103.40 per barrel, and WTI rose 54 cents to $96.89 per barrel.

While Pakistan continued to facilitate talk with Iran, a negotiating team from Qatar arrived in Tehran on Friday in coordination with the U.S. to help secure a deal, according to someone with knowledge of the matter.

Meanwhile, oil stockpiles around the world continued to be consumed, as Iran continued to block the Strait of Hormuz and the U.S. maintained its no access policy to Iranian ports in retaliation; this caused the United Arab Emirates’ ADNOC to point out that even if the waterway was deemed fully open now, full oil flows through the Strait wouldn’t be achieved until the first or second quarters of 2027.

BMI was the latest company to predict what this would do to prices: it raised its average 2026 dated Brent price forecast to $90 from $81.50.

In a similarly bearish vein, Valdis Dombrovskis, economy commissioner for the European Union, said higher energy costs will drive inflation to 3.1 percent in 2026 and 2.4 percent next year, compared to the EU’s earlier forecast of 1.9 percent for this year.

Dombrovskis added that “We expect that this energy inflation will gradually also trickle down to different sectors of the economy.”

In other war-related oil news on Friday, Pakistan was reportedly encouraging Persian Gulf oil producers to establish crude reserve buffers at a planned Energy City at its Gwadar Port; to date, Kuwait has expressed an interest in storing reserves.

Also on Friday, trade sources told media that China is expected to export about 550,000 metric tons of fuels next month, up from around 500,000 tons set to be shipped this month, as government restrictions on shipments largely remain in place to preserve supply for the domestic market.