Oil prices eased after hitting their highest levels since mid-2022, as signals from the US and Israel helped calm markets unsettled by escalating tensions in the Gulf. Brent crude slipped toward $107 per barrel, while US benchmark West Texas Intermediate (WTI) hovered near $94.
The pullback followed reassurances from US President Donald Trump, who ruled out deploying ground troops, and Israeli Prime Minister Benjamin Netanyahu, who indicated Israel would avoid further strikes on Iranian energy infrastructure. The statements offered a degree of relief after weeks of volatility driven by fears of deeper disruption to global supply.
Despite the dip, oil markets remain under pressure from one of the most severe supply shocks in recent history. The conflict has disrupted nearly 10 million barrels per day of output across Gulf producers, according to international estimates. Brent prices have surged nearly 50% this month, reflecting the global nature of the disruption. In contrast, WTI has lagged, weighed down by US-specific dynamics.
Recent strikes have intensified concerns. Damage to key energy infrastructure—including a major liquefied natural gas facility in Qatar—has underscored the long-term risks, with repairs expected to take years. Meanwhile, the near shutdown of the Strait of Hormuz, a critical shipping route, continues to choke supply flows.
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Policy Moves Create Diverging Price Trends
Efforts by Washington to contain price spikes have further complicated market dynamics. The release of crude from US strategic reserves—expected to be replenished later—has widened the gap between Brent and WTI to roughly $13 per barrel. As a result, Brent is on track for a weekly gain, while WTI is set for a decline—an unusual divergence that highlights regional imbalances in supply and demand.
At the same time, US officials have hinted at broader measures, including potentially easing sanctions on Iranian oil and avoiding restrictions on American energy exports, moves aimed at stabilizing global prices. The ripple effects are visible across energy markets. European natural gas prices have nearly doubled from pre-conflict levels, while fuel costs continue to climb globally, raising concerns about inflationary pressures. Although diplomatic messaging has offered temporary respite, uncertainty around the duration and scale of the conflict remains high.
Get all the latest updates on the US,Israel-Iran war here.
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