Oil prices head for second weekly decline amid easing war fears

Oil prices head for second weekly decline amid easing war fears

Oil prices remained mixed on Friday but were heading towards their second consecutive weekly decline as expectations of reduced military escalation between the United States and Iran eased concerns over potential disruptions to global energy supplies. However, continued attacks on commercial shipping in the Middle East kept traders cautious about the possibility of fresh supply shocks.

Brent crude futures were trading almost unchanged, slipping 1 cent to $95.41 per barrel at 0242 GMT. US West Texas Intermediate (WTI) crude fell 20 cents, or 0.25%, to $88.52 per barrel.

The latest losses reversed gains recorded over the previous two sessions, reflecting another volatile week for international oil markets. Earlier hopes of a diplomatic breakthrough in the US-Israel conflict with Iran had supported market sentiment. However, renewed attacks on Saudi Arabian infrastructure by Yemen’s Houthi movement and strikes targeting oil tankers carrying crude from the Gulf raised fresh concerns about the security of regional energy supplies.

Despite fluctuations during the week, both major crude benchmarks remained on course for significant weekly losses. Brent was set to decline around 2.4%, following a sharp 16% drop in the previous week. WTI was heading for a 2.5% weekly loss after falling approximately 13% in the preceding week.

Prices came under renewed pressure after US President Donald Trump said in a post on Truth Social that Washington did not need an agreement with Tehran to bring the conflict to an end. His remarks suggested that the United States would maintain its blockade on Iranian oil shipments alongside existing trade and economic sanctions.

The prospect of continued restrictions on Iranian exports, combined with reduced expectations of an immediate return to large-scale fighting, has influenced traders’ assessment of the market. Investors are weighing the possibility of a prolonged standoff against the risk that further military action could threaten oil production, transportation routes and exports across the Middle East.

Chris Brankin, global adviser at Melbourne-based brokerage MiTrade, said the recent decline in oil prices reflected a relatively balanced assessment of the risks facing the market.

He said crude prices had recovered some ground but traders remained hesitant to make strong moves, indicating that market participants were closely monitoring developments in the region before taking new positions.

Brankin described the oil market as being priced very close to perfection, suggesting that current prices already account for much of the uncertainty surrounding the conflict and its potential impact on supplies.

Market volatility is likely to persist as traders assess developments involving Washington, Tehran and regional armed groups. While reduced expectations of a wider confrontation have eased some pressure on oil prices, continued threats to commercial vessels and vital shipping routes remain a major source of concern for global energy markets.