Oil prices dipped sharply during Asian trading on Friday, reversing some of their recent gains after the White House announced that President Donald Trump will take two more weeks to decide on whether to intervene in the escalating Iran-Israel conflict.
Despite this pullback, crude remains on track for a third consecutive week of gains, as ongoing tensions in the Middle East continue to raise concerns over potential disruptions to global oil supply. Market sentiment has been supported by data revealing a significant drawdown in U.S. crude inventories, signaling tighter fuel supplies in the world’s largest consumer.
By 21:20 ET (01:20 GMT), Brent crude futures for August delivery fell 1.9% to $77.33 per barrel. Meanwhile, West Texas Intermediate (WTI) futures, which did not trade Thursday due to a U.S. holiday, climbed 0.8% to $74.07 a barrel.
Trump to Decide on Military Action Within Two Weeks
The White House clarified that President Trump will make a final call on potential military action against Iran within the next two weeks. The announcement eased fears of an imminent U.S. strike, especially following reports of preparations for such a move.
A U.S. military intervention would mark a major escalation, with Iran warning strongly against any attack. Nuclear negotiations between Washington and Tehran collapsed last week after Israeli airstrikes targeted Iran’s nuclear sites, with the conflict now entering its eighth day.
Attention remains on the possibility of further Israeli strikes on Iran’s nuclear facilities, particularly the Fordow enrichment plant, Iran’s largest.
Oil Markets Eye Third Straight Week of Gains
Brent and WTI futures were set to finish the week with gains between 3.5% and 4%, marking a third consecutive week of rising prices. Last week alone saw crude surge nearly 12%, primarily following Israel’s strikes on Iran.
The market remains concerned about potential supply disruptions from Iran, OPEC’s third-largest oil producer. Additionally, further U.S. sanctions on Iranian oil exports are seen as a risk amid the conflict.
Beyond geopolitical tensions, the recent drop of over 10 million barrels in U.S. crude inventories has further supported prices. With summer travel demand picking up, expectations for increased fuel consumption in the world’s top oil user are also boosting market sentiment.
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