During Friday’s Asian trading session, oil prices took a notable downturn, giving back some of their recent gains after the White House revealed that President Donald Trump would delay a decision on intervening in the escalating conflict between Iran and Israel by two more weeks.
Despite this decline, crude oil remains positioned to register its third consecutive week of gains, as ongoing tensions in the Middle East continue to fuel concerns about potential disruptions to global oil supplies. Market confidence has also been bolstered by recent data showing a significant drawdown in U.S. crude inventories, indicating tighter fuel availability in the world’s largest oil consumer.
As of 21:20 ET (01:20 GMT), Brent crude futures for August delivery had dropped 1.9% to $77.33 per barrel. In contrast, West Texas Intermediate (WTI) futures, which were not traded on Thursday due to a U.S. market holiday, rose 0.8% to $74.07 per barrel.
Trump to Decide on Possible Military Action in Two Weeks
The White House clarified that President Trump plans to make a final decision on any military action against Iran within the next two weeks. This announcement helped ease fears of an imminent U.S. strike, especially amid earlier reports suggesting preparations for such an operation.
A U.S. military intervention would represent a significant escalation, with Iran issuing strong warnings against any attack. Nuclear talks between Washington and Tehran collapsed last week following Israeli airstrikes on Iran’s nuclear facilities, marking the conflict’s eighth day.
Attention remains focused on the potential for further Israeli strikes, particularly targeting the Fordow enrichment plant, Iran’s largest nuclear site.
Oil Markets Eye Third Week of Gains
Brent and WTI futures were on course to close the week up by roughly 3.5% to 4%, marking their third straight week of rising prices. Last week alone saw crude surge nearly 12%, largely in response to Israel’s attacks on Iran.
Market concerns persist over possible supply disruptions from Iran, OPEC’s third-largest oil producer. Additional U.S. sanctions on Iranian oil exports are also viewed as a risk amid the conflict.
Aside from geopolitical tensions, a recent drop of over 10 million barrels in U.S. crude stocks has further supported oil prices. With summer travel season underway, expectations for increased fuel demand in the U.S. — the world’s top oil consumer — are also boosting market sentiment.