Brent crude prices rose in late-day short-covering on Friday as investors worried about US military action, as President Donald Trump presses the Islamic Republic to halt nuclear weapon development. Brent crude futures settled at $71.76 a barrel, up 10 cents, 0.14 per cent. US West Texas Intermediate crude finished at $66.39 a barrel, down 4 cents, 0.06 per cent.
For most of Friday, Brent and WTI were down, with the market awaiting developments in the struggle between Iran and the US “We’re caught in between anticipation what’s going to happen with the US and Iran and denial an attack’s going to happen,” said Phil Flynn, senior analyst with Price Futures Group.
The oil market shrugged off a US Supreme Court decision ruling unconstitutional Trump’s use of a law to levy tariffs in national emergencies, Flynn said.
“The tariffs decision didn’t seem to move us too much,” he said. “I think there is a sense the tariffs are going to get done another way.” Over the week, Brent and WTI were both up more than 5 per cent.
Trump said this week that “bad things” would happen to Iran if there was not a deal to end the Islamic Republic’s development of nuclear weapons.
Iran’s foreign minister said on Friday he expected to have a draft counterproposal ready within days following nuclear talks this week as Trump said he was considering limited military strikes.
Betting on higher prices
Iran, a major oil producer, lies opposite the oil-rich Arabian Peninsula across the Strait of Hormuz, through which about 20 per cent of global oil supply passes. Conflict in the area could limit oil entering the global market and push up prices.
“We’re waiting for a potential binary outcome, if we should take Trump’s words at face value,” said Ole Hansen, head of commodity strategy at Saxo Bank. “The market is nervous, it’s going to be a wait-and-see day.”
Traders and investors ramped up purchases of call options on Brent crude in recent days, betting on higher prices, Saxo Bank analysis shows.
Also supporting oil were reports of falling crude stocks and limited exports in the world’s biggest oil-producing and exporting countries.
US crude inventories dropped by 9 million barrels as refining utilisation and exports climbed, an Energy Information Administration report showed on Thursday. Markets were also considering the impact of ample supply, with talks of OPEC+ leaning towards a resumption in oil output increases from April.
The oil surplus that was evident in the second half of 2025 continued in January and is likely to persist, JP Morgan analysts Natasha Kaneva and Lyuba Savinova said in a note.
“Our balances continue to project sizeable surpluses later this year,” they said, adding that output cuts of 2 million barrels per day would be needed to prevent excess inventory builds in 2027.
