Oil prices took a dip on Friday as the White House hit the brakes on making any immediate decisions about getting directly involved in the growing conflict between Israel and Iran. Still, despite the drop, oil is on track for its third week of gains.
Brent crude futures slipped by $2 — that’s around 2.5% — bringing the price down to $76.85 a barrel by early morning in London. But even with that decline, prices are still up more than 3% over the week.
As for U.S. oil, the West Texas Intermediate (WTI) crude for July delivery — which didn’t trade on Thursday due to the U.S. holiday — dropped slightly by 14 cents to $75. The more actively traded August contract edged up by 19 cents to $73.69.
The market had seen a sharp jump on Thursday, almost 3%, following dramatic military action between Israel and Iran. Israel had reportedly targeted Iran’s nuclear facilities, while Iran responded with missile and drone strikes — an alarming escalation in a week-long conflict that shows no signs of slowing.
With Iran being the third-largest oil producer in OPEC, any instability in the region sends ripples through global energy markets.
Initially, oil prices were climbing on fears that the U.S. might step into the conflict. But that speculation cooled after the White House indicated President Donald Trump would wait up to two weeks before making any decision on direct involvement.
“This two-week window seems to be a strategic pause,” said Phil Flynn, an analyst at The Price Futures Group. “It opens up space for diplomacy and de-escalation, which has calmed the markets — for now.”
Tony Sycamore from IG added, “Trump has used this kind of timeline before without taking action. So unless that changes, oil prices might stay steady or even climb further.”
Adding to the market’s unease is OPEC+’s continued push to boost output. “The group’s firm stance on increasing supply has made investors nervous,” said Emril Jamil, oil analyst at LSEG.
While the short-term dip brings some relief to consumers, the broader tension in the Middle East and policy uncertainty in Washington mean the energy markets will likely remain on edge.
