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(Reuters) – Oil prices fell on Friday, but remained on course for a third consecutive weekly rise, after the White House delayed a decision on U.S. involvement in the Israel-Iran conflict.
Brent crude futures fell $1.89, or 2.4%, to $76.96 a barrel by 1000 GMT. They were still set to gain nearly 4% on the week.
U.S. West Texas Intermediate crude for July – which did not settle on Thursday as it was a U.S. holiday and expires on Friday – was up 82 cents, or 1.1% to $75.96.
The more liquid August contract was up around 0.4%, or 27 cents, to $73.77.
On Thursday prices jumped almost 3% after Israel bombed nuclear targets in Iran, while Iran – OPEC’s third-largest producer – fired missiles and drones at Israel. Neither side showed any sign of backing down in the week-old war.
Brent prices trimmed gains after the White House said President Donald Trump would decide whether the U.S. will get involved in the Israel-Iran conflict in the next two weeks.
“However, while Israel and Iran carry on pounding away at each other there can always be an unintended action that escalates the conflict and touches upon oil infrastructure,” PVM analyst John Evans said.
“The world has more than adequate supply for 2025, but not if the nightmare scenario of 20 million (barrels per day) being blocked in the seas of Arabia, however briefly that might be.”
Iran has in the past threatened to close the Strait of Hormuz to traffic in retaliation for Western pressure. Any closure of the strait could restrict trade and affect global oil prices.
The country is maintaining crude oil supply by loading tankers one at a time and moving floating oil storage much closer to China, two vessel tracking firms told Reuters on Thursday, as the country seeks to keep a key source of revenue while under attack from Israel.
“I think the current risk premium is close to $10/bbl for Iran-Israel, but I don’t see prices tracking back to $60s in near term,” said Panmure Liberum analyst Ashley Kelty.
An escalation of the conflict in such a way that Israel attacks export infrastructure or Iran disrupts shipping through the strait could then lead to $100 per barrel of oil being a reality, he added.
Reporting by Seher Dareen in London, Sudarshan Varadhan and Florence Tan; Editing by Shri Navaratnam, Barbara Lewis and David Evans
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