Oil prices fell on Friday as the White House postponed a decision on potential U.S. involvement in the Israel-Iran conflict. Despite this decline, oil remains on track for a third consecutive weekly increase. Brent crude futures dropped by $2.57, or about 3.3%, to $76.28 a barrel. However, they were still expected to end the week with a gain of nearly 3%. This reflects lingering concerns about geopolitical risks in the Middle East.
Middle East Tensions Fuel Oil Volatility Amid Uncertainty Over U.S. Involvement Decision
Earlier in the week, oil prices surged by nearly 3% after Israel bombed nuclear targets in Iran, prompting retaliatory missile and drone attacks from Tehran. Both nations, key players in the region, have shown no signs of de-escalating the conflict. While the current round of fighting hasn’t disrupted oil production, the market remains highly sensitive to any development that could threaten regional energy infrastructure.
Oil Prices Slip as Trump Delays Israel-Iran Decision, but $100 Spike Still LoomsBrent crude prices retreated after the White House announced that President Donald Trump would make a decision within two weeks regarding U.S. involvement in the conflict. This uncertainty has kept investors on edge. Analysts, including John Evans of PVM, warned that accidental escalations could potentially damage oil facilities, leading to a sharp rise in prices.
Strait of Hormuz Threat Looms, Escalation Could Push Oil Prices to $100
The market is particularly wary of threats to the Strait of Hormuz, a critical oil transit chokepoint. Iran has previously hinted at the possibility of closing this route in times of heightened tension. Nevertheless, UBS analyst Giovanni Staunovo noted that oil exports remain uninterrupted, and there is currently no sign of a supply shortage, keeping prices somewhat stable for the time being.
Analysts caution that a significant escalation—such as attacks on oil export infrastructure or blockades in the Strait of Hormuz—could lead to a dramatic price surge. Ashley Kelty of Panmure Liberum suggested that in such a scenario, oil could quickly hit $100 per barrel. The coming weeks are likely to be pivotal as geopolitical decisions unfold and market sentiment continues to react to developments in the Middle East.
