Oil prices declined during Asian trading on Friday, extending losses from the previous session as worries over supply disruptions eased after the probability of a U.S. military strike on Iran diminished.
Brent crude slipped by 21 cents, or 0.3%, to $63.55 a barrel, while U.S. West Texas Intermediate fell 15 cents, also 0.3%, to $59.04 a barrel by 0418 GMT.
Earlier this week, both Brent and WTI climbed to multi-month highs after protests erupted in Iran and U.S. President Donald Trump signaled that military action against Tehran was a possibility. Despite Friday’s pullback, Brent was still on track for a fourth consecutive weekly gain.
Sentiment shifted late on Thursday after Trump said Iran’s crackdown on protesters was easing, helping to reduce fears of potential military intervention that could disrupt global oil supplies.
Although Brent has surrendered part of its earlier rally, prices remain above levels seen a week ago. According to analysts at BMI, the retreat was driven by Trump’s remarks that he would delay any military strikes on Iran.
Given the risk of political instability in Iran, BMI analysts warned that oil markets could face increased volatility as investors assess the likelihood of supply interruptions.
Market participants remain cautious about the broader outlook, with analysts still bearish on expectations of ample supply later this year, despite earlier guidance from OPEC pointing to a balanced market.
“Market sentiment is leading price action, but headline-driven moves tend to fade quickly when fundamentals remain comfortable,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. She added that despite ongoing geopolitical risks and macroeconomic uncertainty, supply conditions remain sufficient unless Chinese demand rebounds sharply or physical supply bottlenecks emerge. Under current conditions, Brent is expected to trade largely within a $57 to $67 range.
On Wednesday, OPEC said global oil supply and demand were likely to stay balanced in 2026, with demand growth in 2027 projected to match this year’s pace.
Meanwhile, energy major Shell published its 2026 Energy Security Scenarios on Thursday, presenting a more optimistic long-term outlook for energy consumption. The company estimates that global primary energy demand could be 25% higher by 2050 compared with last year.
