Crude prices fell Friday in early Asian trading, pulling back from recent highs after the White House confirmed that President Donald Trump will delay any decision on a potential U.S. strike against Iran for two weeks.
The announcement helped cool investor fears of an immediate escalation in the Israel-Iran conflict, which has intensified over the past week. While the risk of broader military engagement persists, Trump’s stance suggests that Washington is still exploring diplomatic solutions, including nuclear negotiations with Tehran.
- Brent crude for August delivery dropped 1.9% to $77.33 a barrel
- WTI crude rose 0.8% to $74.07 a barrel, catching up after Thursday’s holiday closure
Despite Friday’s pullback, oil markets remain on edge due to the potential for further strikes on Iranian nuclear sites, particularly the heavily fortified Fordow facility.
Weekly Gains Driven by Supply Fears
While oil eased today, both Brent and WTI are on track for a third consecutive week of gains, supported by geopolitical risk and tightening U.S. supply data.
Prices surged last week—up nearly 12%—after Israel struck Iranian nuclear infrastructure, escalating tensions and raising fears that crude flows from the Middle East could be disrupted.
Iran, a major OPEC producer, faces additional pressure from potential new U.S. sanctions on oil exports if conflict with Israel continues.
Key drivers behind oil’s three-week rally include:
- Ongoing military conflict in the Middle East
- Potential U.S. involvement in the region
- Risk of sanctions on Iranian crude
- Supply constraints in the U.S. market
U.S. Inventory Data Signals Demand Strength
Crude prices also found support from data showing a substantial draw in U.S. inventories. The American Petroleum Institute reported a drop of over 10 million barrels last week, well above analyst expectations.
The decline points to robust fuel demand, particularly as the summer travel season gains momentum across the United States.
Additional tailwinds for oil include:
- Anticipated increase in U.S. gasoline and jet fuel demand
- Limited OPEC+ production hikes amid volatile global conditions
While uncertainty over the Middle East conflict remains a core market concern, short-term price pressures appear tempered by Trump’s decision to delay any strike on Iran. Still, traders remain cautious, with eyes set on both geopolitical developments and upcoming Fed policy cues.