NEW YORK — Wall Street investors braced for potential volatility in oil markets on Friday as high-level U.S.-Iran ceasefire negotiations opened in Islamabad, Pakistan, with traders monitoring any developments that could affect energy supplies through the Strait of Hormuz, according to market reports and analysts.
U.S. Vice President JD Vance arrived in the Pakistani capital on Saturday for talks with Iranian officials aimed at solidifying a fragile ceasefire that halted more than five weeks of conflict involving the United States, Israel and Iran. Oil prices eased slightly ahead of the sessions after swinging sharply in recent days, with Brent crude and West Texas Intermediate futures holding near elevated levels following the initial ceasefire announcement.
The talks, mediated by Pakistan, follow a recent escalation that disrupted shipping through the Strait of Hormuz — a critical chokepoint for roughly one-fifth of global oil trade — and drove energy prices higher before the truce. Stocks on Wall Street drifted mostly lower Friday amid the uncertainty, with the S&P 500 falling about 0.1 percent and the Dow Jones Industrial Average declining 0.6 percent, while oil prices slipped modestly, according to Associated Press reporting.
Energy sector shares have been particularly sensitive to news from the region. Crude prices plunged more than 13 percent in a single session earlier this week after the ceasefire was announced but later rebounded on doubts about the truce’s durability and continued restrictions on Hormuz passage, multiple outlets including Reuters and NPR reported.
Analysts noted that a lasting agreement could eventually ease supply concerns and lower the risk premium in oil prices, though any breakdown in talks might prompt renewed spikes. “The market is still prone to big swings on developments around the war,” one trader told AP, reflecting widespread caution heading into the weekend sessions.
President Donald Trump has warned that the U.S. could resume stronger action if a durable deal is not reached, while Iranian officials have cited conditions including access issues and regional matters before full normalization.
As of Saturday afternoon in Islamabad, no immediate breakthroughs had been reported from the initial meetings. Oil futures trading remained limited over the weekend, with investors awaiting outcomes from the Vance-led delegation, which includes special envoy Steve Witkoff and senior adviser Jared Kushner. Details on any specific agreements regarding energy flows remained unclear.
