Oil prices fell approximately 3% early Friday, with Brent crude futures at $97.72 per barrel and West Texas Intermediate at $89.59 per barrel. Despite this drop, both benchmarks are on track for weekly gains of 10.9% and 8.6%, respectively. The ongoing military actions by the U.S.
Central Command against Iran, which have included strikes on military targets, are contributing to heightened geopolitical risks. President Trump indicated a potential for a 'massive attack' on Iran, which could further destabilize the region.
Analysts, including Daniela Hathorn from capital.com, noted that the instability around key shipping routes is increasing the geopolitical risk premium in oil markets, dampening investor sentiment.
Giovanni Staunovo from UBS Global Wealth Management warned that the market may be overly optimistic about a quick recovery in oil production from the Middle East, suggesting that ongoing conflict will keep oil prices supported. UBS forecasts Brent crude to drop to $85 a barrel by year-end, reflecting concerns over sustained supply disruptions