Oil prices ease on de-escalation signals but still above $100
What's the story
Oil prices fell on Friday after Israeli Prime Minister Benjamin Netanyahu announced that his country would no longer target Iran's energy infrastructure. The announcement followed a public rebuke of Israeli strikes by US President Donald Trump. Brent futures fell $1.24 or 1.1% to $107.41 per barrel while West Texas Intermediate (WTI) crude dropped $1.24 (1.3%) to $94.90 per barrel, at the time of writing.
Sanction review
US may lift sanctions on Iranian oil
To curb the rise in oil prices, US Treasury Secretary Scott Bessent said Washington may consider lifting sanctions on Iranian oil stuck on tankers. He also hinted at a possible second release from the US Strategic Petroleum Reserve. This comes as part of efforts to stabilize energy markets amid ongoing geopolitical tensions and supply disruptions caused by Iran's strikes on oil and gas facilities in the Gulf region.
International cooperation
International community steps in to address potential oil crisis
A joint statement from Britain, France, Germany, Italy, the Netherlands and Japan expressed their readiness to support efforts ensuring safe passage through the Strait. This key route accounts for nearly 20% of global oil and LNG flows. The countries welcomed the International Energy Agency's decision to authorize a coordinated release of strategic petroleum reserves as part of measures aimed at stabilizing energy markets amid ongoing conflicts in the region.
Infrastructure damage
Regional conflict threatens global oil supply
The recent spike in prices was triggered by Israel's attack on Iran's South Pars gas field, a major source of domestic supply and exports to Iraq and Turkey. In retaliation, Iran targeted Qatar's Ras Tanura Industrial Complex, damaging its gas infrastructure. Saudi Arabia reported a drone strike on its Samref refinery while the UAE closed down a major gas facility after debris from intercepted missiles fell on it.
Price forecast
Crude prices could rise further
Looking ahead, crude prices could go up from current levels. Kotak Securities's Kayanat Chainwala predicts oil could hit $120 per barrel in the near term and possibly reach $150 if the conflict continues beyond a month with geopolitical tensions remaining high. Nuvama Institutional Equities agrees, saying continued closure of the Strait of Hormuz could push crude prices to $110-150 per barrel over the next 4-8 weeks.