Oil Prices Recover Slightly but Remain Under Pressure

Oil prices edged higher on Friday but remained on course for a second consecutive weekly decline as expectations of further direct military escalation between Washington and Tehran eased.

Brent crude futures rose 0.9% to $96.67 per barrel, while US West Texas Intermediate gained 0.5% to $89.18 at 1414 GMT. Despite the daily recovery, both benchmarks were set to fall approximately 2% over the week.

The declines follow a particularly weak previous week, when Brent lost 16% and WTI dropped 13%. The latest price movements reflect changing expectations around the US-Israeli war on Iran, now in its ninth month, as well as concerns about demand in the United States.

Washington Focuses on Economic Pressure

US President Donald Trump indicated that a deal with Iran was not necessary to end the war, reinforcing expectations that Washington could continue relying on economic sanctions and restrictions on oil shipments rather than intensifying military operations.

The prospect of a prolonged blockade has reduced some concerns about renewed direct military confrontation. However, the situation remains uncertain, with attacks on shipping and energy infrastructure continuing to pose risks to regional supply.

Earlier hopes for a diplomatic rapprochement were offset by reported strikes on Saudi Arabian infrastructure by Yemen’s Iran-backed Houthis and attacks on tankers transporting crude from the Gulf.

US Inventory Growth Signals Softer Demand

Weakening US demand has also contributed to the downward pressure on oil prices. Rising crude and fuel inventories suggest a relatively subdued consumption outlook, according to market analysis.

The US Energy Information Administration reported that crude and fuel inventories increased last week. The build was driven by weaker demand for refined products and a significant increase in oil imports.

Higher inventories can indicate that available supply is exceeding near-term consumption needs, reducing immediate upward pressure on prices. This demand-side weakness has become an important counterweight to geopolitical supply concerns.

Strait of Hormuz Remains a Critical Supply Risk

Despite the recent price declines, the security of oil shipments through the Strait of Hormuz remains a major concern. The waterway is a critical export route for crude from leading Middle Eastern producers.

Iran’s military said four oil tankers were hit by explosions in the strait on Thursday after ignoring warnings. The claims had not been independently verified at the time of reporting.

Separately, Yemen’s Iran-aligned Houthis said they had attacked a pumping station on Saudi Arabia’s East-West oil pipeline, an oil facility in Yanbu on the Red Sea and an Aramco building in Riyadh.

What Investors Should Watch Next

Oil markets remain caught between signs of softer US consumption and persistent geopolitical risks to supply. Further inventory increases or evidence of weaker demand could extend the recent price decline.

However, any confirmed disruption to shipments through the Strait of Hormuz or additional attacks on regional energy infrastructure could quickly reverse the trend. The balance between demand conditions and the security of Middle Eastern exports will remain central to oil price movements.