-- Crude oil futures settled lower in after-hours trading on Friday as the US and Iranian delegations arrived in Islamabad for talks seen as crucial to the success of the ceasefire and the reopening of the Strait of Hormuz.
Front-month West Texas Intermediate crude futures dropped by 2.29% to $95.63 per barrel, while Brent futures were down 1.63% to $94.36/bbl.
US and Iranian negotiating teams arrived in Pakistan on Friday for peace talks, though Tehran insisted on measures it said needed to be addressed first, casting doubt on the weekend meetings.
"Two of the measures mutually agreed upon between the parties have yet to be implemented: a ceasefire in Lebanon and the release of Iran's blocked assets prior to the commencement of negotiations," Iranian Parliament Speaker Mohammad Bagher Ghalibaf said in a post on X on Friday.
President Trump dispatched Vice President JD Vance, along with special envoy Steve Witkoff and son-in-law Jared Kushner, to Pakistan to meet with Iranian officials, after announcing a two-week ceasefire agreement earlier on Tuesday.
On Friday, Trump said the only reason Iranians are alive "is to negotiate", while noting that the only leverage Tehran holds is its ability to create short-term pressure by blocking the Strait.
"The Iranians don't seem to realize they have no cards, other than a short-term extortion of the World by using International Waterways," Trump said in a social media post. "The only reason they are alive today is to negotiate!"
ING analysts said while Trump struck an optimistic tone on resolving the six-week conflict, he threatened Tehran over charging fees in the Hormuz.
Trump has expressed frustration with Iran's continued blockade of nearly total closure of traffic via the Hormuz despite a ceasefire deal that included an agreement to open it.
On Thursday, the US President said that Iran should stop charging tolls to vessels transiting the Hormuz Strait, as traffic through the strategic waterway remains largely constrained.
Iran is considering a shift in how transit fees are levied on vessels transiting the strategic waterway, with a proposal to mandate payments in its national currency, according to media reports.
The latest shipping data shows that vessel activity through the Hormuz has increased slightly since the ceasefire took effect on Apr.8, but flows remain well below normal levels. MarineTraffic said 14 vessels crossed the Strait on Apr. 8-9, including nine crossings on 9 April.
Over 130 million barrels of crude and condensate remain stranded across about 80 laden tankers, largely VLCCs, with key exporters including Saudi Arabia, Iraq and the UAE unable to move cargoes, Kpler strategists said in a note on Friday.
On the supply front, Saudi Arabia said on Thursday that Iranian attacks on its energy infrastructure reduced the country's oil production capacity and East-West Pipeline throughput by about 600,000 barrels per day and 700,000 b/d, respectively.