Oil closes nearly 4% lower on hopes of Middle East de-escalation

Oil drilling rigs

Oil prices closed lower on Friday as profit-taking and growing optimism over renewed peace talks between the United States and Iran weighed on the market. The renewed diplomatic push is reportedly being led by China and Pakistan, which are seeking to reopen negotiation channels between the two sides.

Despite Friday's decline, crude prices posted strong weekly gains after surging earlier in the week amid escalating military confrontations between Washington and Tehran and reduced oil flows through the Strait of Hormuz.

Brent crude climbed above the $100-per-barrel mark in Thursday's trading before reversing course on Friday following reports that Pakistan and Iran were exploring the possibility of resuming negotiations with the United States with China's backing.

In other developments, Russia said its forces carried out overnight strikes on three Ukrainian ports, including fuel storage facilities and loading infrastructure used to support Ukrainian military operations.

Meanwhile, Kazakhstan's Energy Ministry said oil producers had temporarily reduced output after drone attacks targeted the Caspian Pipeline Consortium's main export terminal on the Black Sea, forcing operations to halt.