Oil Slides 3% but Heads for 10% Weekly Surge as US-Iran Tensions Escalate

Brent falls below $98 a barrel after sharp rally, while geopolitical risks continue to underpin the market.

Oil prices retreated sharply on Friday as investors locked in profits following a week of strong gains, although crude remained on track for its biggest weekly advance in months amid mounting geopolitical tensions between the United States and Iran.

Global benchmark Brent crude futures dropped 3.6% to $97.10 per barrel, trimming part of this week's rally but still positioning the contract for an almost 10% weekly gain. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell 3.4% to $89.07 per barrel, leaving it up roughly 8% for the week.

Latest Oil Prices: 

WTI CRUDE 89.91 -2.47% 

BRENT CRUDE 97.39 -3.28%

MURBAN CRUDE  97.04 -9.45%

NATURAL GAS 2.938 +0.75%

The week's gains were fueled by growing fears that the conflict between Washington and Tehran could disrupt energy supplies from the Middle East, particularly through the Strait of Hormuz, a vital artery for global oil shipments.

Market sentiment remained highly sensitive after U.S. President Donald Trump said he was considering launching a military offensive against Iran that would be "larger than anything seen so far," signaling a potential escalation in regional hostilities.

Adding to supply concerns, the U.S. Central Command (CENTCOM) confirmed it had carried out its 13th consecutive night of strikes against Iranian targets, hitting military command centers, drone storage facilities, communications infrastructure, coastal surveillance sites, and naval capabilities.

According to CENTCOM, the operations are intended to reduce threats posed by Iran to civilian shipping and commercial vessels transiting the Strait of Hormuz. The military added that the strategic waterway remains open, with commercial traffic continuing under U.S. naval protection despite recent attacks attributed to Iran's Revolutionary Guard.

The United States currently has more than 50,000 troops deployed across the Middle East, underscoring Washington's expanded military presence as regional tensions intensify.

In remarks to Axios on Thursday, Trump said he was close to deciding on a broad military operation against Iran following the expansion of the regional conflict into the Red Sea.

The president said the proposed strikes would be "bigger than anything the war has seen so far," arguing that Iran had not yet suffered sufficient consequences.

Trump's comments came after he warned Tehran would be held responsible for any future attacks by the Iran-backed Houthi movement in Yemen, following the group's claim of responsibility for targeting two Saudi oil tankers in the Red Sea.

Despite Friday's decline, analysts said geopolitical risk premiums remain firmly embedded in crude prices, with traders closely monitoring developments that could threaten oil exports or shipping routes across the Gulf, leaving the market vulnerable to renewed volatility.