Oil prices experienced a slight decline amid subdued market activity. Peace negotiations between the United States and Iran have reached a stalemate but have not completely broken down, prompting some traders to reduce their risk exposure ahead of the weekend.

W&T Offshore (WTI) futures fell, yet the commodity recorded a weekly gain for the second consecutive week, with an approximate 8% increase over the period. Uncertainty surrounding future supplies has led to significant price volatility, which has, to some extent, dampened trading volumes.

Markets in several countries, including Singapore, Germany, France, and Brazil, were closed in observance of Labor Day.

The June delivery W&T Offshore (WTI) futures contract in New York declined by 3%, settling at $101.94 per barrel.

The July delivery Brent crude futures contract settled 2% lower at $108.17 per barrel.

Iran expressed readiness to continue diplomatic efforts with the United States to end the conflict but simultaneously emphasized that its armed forces remain "on high alert."

U.S. President Donald Trump struck a more pessimistic tone, stating that Iran had put forward demands he could not agree to. However, some traders interpreted this as a negotiating tactic, suggesting it does not indicate an abandonment of peace efforts by the United States.

Jens Naervig Pedersen, a strategist at Danske Bank, commented, "The market is beginning to realize that it may take longer for the Strait of Hormuz to resume maritime oil transport, which will further deplete existing inventories. Oil prices need to rise even higher to curb demand and subsequently rebalance the market."

Chevron CEO Mike Wirth expressed concerns in an interview with CNBC about the potential depletion of global oil supplies and the resulting impact on demand.