Oil prices experienced a significant decline on Friday, reversing a portion of the gains made during the previous trading session. This downturn came after Israeli Prime Minister Benjamin Netanyahu indicated that the ongoing conflict with Iran may conclude sooner than anticipated. As of the latest reports, West Texas Intermediate (WTI) crude was priced at $92.57, reflecting a decrease of 3.12%, while Brent crude fell to $105.18, down by 3.19%.
This decline follows a turbulent 24-hour period in the oil market, where prices had surged sharply due to heightened tensions following an Israeli offensive on the South Pars gas field and retaliatory strikes by Iran on regional energy infrastructure. On Thursday, these events momentarily drove Brent crude prices to surpass $119 per barrel as concerns over potential supply disruptions reached a peak.
The shift in market sentiment was influenced by Netanyahu’s comments regarding the effectiveness of joint U.S.-Israel military operations, which he claimed had significantly undermined Iran’s strategic capabilities. He expressed that the conflict would likely reach a resolution sooner than people expect. Notably, Netanyahu indicated that Israel would halt further attacks on Iran’s South Pars gas field in response to a request from President Trump, alleviating immediate fears of further escalations that could threaten critical energy supply routes.
The broader financial markets responded positively to this altered outlook. South Korean equities saw a 0.5% increase in early trading as a result of the changing sentiment, while the S&P 500 managed to rebound from deeper losses earlier in the session, closing 0.3% lower.
Adding to the downward pressure on oil prices, U.S. Treasury Secretary Scott Bessent announced that the U.S. government could consider an additional release from the Strategic Petroleum Reserve as a measure to stabilize oil prices.
Despite the recent pullback, oil prices remain high as the market struggles to compensate for the disrupted supply. In response to the current shortfall, U.S. oil is being rerouted through the Panama Canal to meet demand in Asia. Furthermore, there are discussions in the U.S. administration about potentially lifting sanctions on certain Iranian oil exports as a strategy to alleviate the ongoing supply crunch.
