Global oil prices retreated sharply on Friday after surging above $100 a barrel, though both major benchmarks remain on course for strong weekly gains amid escalating conflict in the Middle East and growing concerns over global energy supplies.
Brent crude fell nearly 4% to $96.70 a barrel, after closing above $100 in the previous session for the first time since May. West Texas Intermediate (WTI) dropped 3.4% to $89.04 a barrel.
Despite Friday’s decline, Brent is still on track to gain nearly 10% this week, while WTI is set for an increase of almost 8%.
Market volatility has been driven by rising tensions following attacks on two Saudi oil tankers in the Red Sea, claimed by Iran-backed Houthi rebels. The incidents have heightened fears of disruptions to one of the world’s most important energy shipping corridors.
U.S. President Donald Trump responded by warning Iran and the Houthis of “major military punishment,” adding to concerns that the conflict could further threaten global oil supplies.
Analysts say the risk remains elevated as key oil-producing regions and major shipping routes continue to be affected by the conflict.
Iran has previously warned that the Houthis could close the Bab el-Mandeb Strait if U.S. attacks on Iranian infrastructure continue. The waterway is one of the world’s busiest energy transit routes, second only to the Strait of Hormuz for global oil shipments.
Shipping data, however, suggests energy flows have not been completely disrupted. Vessel traffic through both the Strait of Hormuz and the Bab el-Mandeb Strait has continued, indicating that oil exports are still moving despite heightened security risks.
JPMorgan analysts estimate that every additional month of significant supply disruption could increase Brent crude prices by $7 to $8 per barrel, potentially pushing average monthly prices to around $114 if disruptions persist for three months.
Elsewhere, geopolitical tensions also weighed on markets after Russia said it launched overnight strikes on Ukrainian port infrastructure, while Kazakhstan reported temporary oil production cuts following suspected Ukrainian drone attacks on a key Black Sea export terminal.
