Oil prices slipped in Asian trade as the likelihood of a US strike on Iran receded.
Markets remain volatile despite Brent still heading for a fourth weekly gain.
Analysts say ample supply could keep oil prices range-bound in coming months.
Oil prices slipped further in Asian trading on Friday as easing geopolitical tensions reduced fears of supply disruptions, with markets reacting to signs that the United States is unlikely to launch a military strike on Iran. Brent crude fell 21 cents, or 0.3%, to $63.55 a barrel, while U.S. West Texas Intermediate declined 15 cents, or 0.3%, to $59.04 a barrel by 0418 GMT, Reuters reported.
The losses extended declines from the previous session after U.S. President Donald Trump indicated that Iran’s crackdown on protesters was easing, dampening concerns that escalating unrest could trigger military action and threaten oil flows. According to Reuters, prices had climbed to multi-month highs earlier in the week after protests intensified in Iran and Trump signalled the possibility of U.S. strikes.
Despite Friday’s dip, Brent was still on course for a fourth consecutive weekly gain, having risen sharply on heightened geopolitical risk before giving back some of those advances. “Brent prices have given back earlier gains but remain higher than a week ago, with the decline in prices spurred by Trump's statement that he would hold off on military strikes on Iran,” BMI analysts said in a note, as cited by Reuters.
“Given the potential political upheaval in Iran, oil prices are likely to experience greater volatility as markets digest the potential for supply disruptions,” the analysts added.
Market participants, however, remained cautious about the longer-term outlook, with several analysts maintaining a bearish stance on expectations of supply levels later this year, even after OPEC previously projected a balanced market.
“Sentiment is driving markets, but the impact of headlines is always short-lived, especially when fundamentals look comfortable in the backseat,” said Phillip Nova senior market analyst Priyanka Sachdeva. “Despite the steady drumbeat of geopolitical risks and macro speculation, the underlying balance still points to ample supply ... unless we see a genuine revival in Chinese demand or a meaningful bottleneck in physical barrel flows, oil looks range-bound, with Brent broadly hovering between $57 and $67.”
On Wednesday, OPEC said oil supply and demand would remain balanced in 2026, with demand growth in 2027 expected to match the pace seen this year, Reuters reported.
Meanwhile, oil major Shell released its 2026 Energy Security Scenarios on Thursday, presenting a more optimistic outlook for long-term energy demand. The company estimated that primary energy demand by 2050 could be 25% higher than last year, according to Reuters.
(With inputs from Reuters)
