Oil prices recovered from early declines to trade largely unchanged during Asian hours on Friday, while still heading for strong weekly gains as escalating tensions in the Middle East raised concerns about potential disruptions to global crude supplies.
As of 01:49 ET (06:49 GMT), Brent crude futures for May delivery slipped 0.2% to $85.25 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 0.3% to $80.75 per barrel.
Brent had surged nearly 5% in the previous session to reach its highest level since July 2024, while WTI climbed more than 8%.
If current gains hold, both benchmarks are on pace to rise by more than 18% for the week.
Middle East conflict shows little sign of cooling
Some traders took profits following the sharp rally earlier in the week, but oil prices remained supported as geopolitical tensions intensified and concerns persisted over the safety of major energy shipping routes.
The conflict in the Middle East entered its seventh day on Friday, with hostilities between the United States, Israel and Iran continuing to escalate. Missile attacks, retaliatory strikes and disruptions to energy infrastructure across the region have kept global oil markets on edge.
U.S. President Donald Trump said he wanted a role in determining Iran’s next leader once the conflict ends.
Oil prices have climbed rapidly throughout the week, with particular attention focused on the Strait of Hormuz, a narrow channel between Iran and Oman that serves as the world’s most critical oil transit route.
Around 20% of global oil supply moves through the Strait of Hormuz every day, making it one of the most important chokepoints in international energy trade. Any interruption to shipments through the passage could sharply tighten global supply and drive prices significantly higher.
“The market remains well supported with few signs of de-escalation in the Middle East and a resumption of energy flows in the region,” ING analysts said in a note.
“Clearly, with every day that goes by without flows resuming, the oil market will reprice the amount of supply lost, leaving room for prices to move higher,” they added.
U.S. permits India to purchase Russian oil
In an effort to ease some of the supply concerns, the United States said it would temporarily allow India to buy Russian oil for a period of 30 days.
“While this might help put some immediate downward pressure on the market, it is not a game-changer. The only way for prices to come down on a sustained basis is a resumption of oil flows through the Strait of Hormuz,” ING analysts wrote.
Analysts note that the recent surge in oil prices could add to global inflation pressures, particularly if the conflict disrupts supply for an extended period. Rising energy costs may also complicate the outlook for central banks, including the U.S. Federal Reserve.