Oil prices were little changed on Friday, but both major benchmarks remained on track to post solid weekly gains as investors weighed renewed military tensions between the United States and Iran against expectations that the conflict will remain limited and avoid disrupting crude exports from the Persian Gulf.
At 14:18 ET (18:18 GMT), U.S. West Texas Intermediate (WTI) crude futures edged down 0.1% to $72.01 per barrel, while Brent crude futures slipped 0.07% to $76.25 per barrel.
Although trading was subdued during the session, Brent was still heading for a weekly gain of around 5%, with WTI up roughly 4%. Prices surged earlier in the week after renewed attacks near the Strait of Hormuz revived concerns over supply disruptions before easing as traders concluded the conflict was unlikely to broaden significantly.
Strait of Hormuz Remains Under Close Watch
The United States carried out another round of airstrikes against military targets in Iran on Thursday, saying the operations were intended to further reduce Tehran’s ability to threaten commercial shipping through the Strait of Hormuz.
Iran responded with missile and drone attacks aimed at U.S.-aligned countries, including Bahrain, Kuwait, Qatar and Jordan, marking one of the most extensive military exchanges since last month’s temporary agreement.
The latest developments followed attacks on several commercial vessels operating in and around the Strait earlier this week, prompting some shipping companies to delay or reconsider voyages through one of the world’s most important oil transit routes. While tanker traffic has gradually improved since the June agreement reopened the passage, activity remains below pre-conflict levels as insurers and shipping companies continue to evaluate security conditions.
President Donald Trump said the attacks on commercial shipping had effectively ended the fragile ceasefire and warned that the United States would respond more aggressively if Iran targeted vessels again. Meanwhile, diplomatic efforts continued as Iranian Foreign Minister Abbas Araghchi held discussions with counterparts from Saudi Arabia, Oman and Turkey in an effort to prevent the conflict from expanding.
Markets Expect Limited Escalation
Analysts at IG said in a note that oil’s relatively restrained reaction despite continued military exchanges suggests investors increasingly believe the conflict will remain contained rather than evolve into a prolonged regional crisis.
The brokerage noted that U.S. military action has so far been directed at Iranian military infrastructure rather than oil production or export facilities, while crude exports from the Gulf have continued largely uninterrupted, reducing fears of an immediate supply shock.
According to IG, the principal upside risks for oil prices would emerge if Washington imposed tighter restrictions on Iranian crude exports or if the conflict directly affected energy infrastructure or shipping through the Strait of Hormuz.
For now, resistance within the region to disrupting commercial shipping and the continued resilience of Gulf oil exports have helped prevent a further surge in prices despite heightened geopolitical uncertainty.
Attention is now focused on developments over the weekend, particularly any escalation in military activity, tanker movements through the Strait of Hormuz and indications that Gulf crude exports may begin to slow.