Oil slides on Friday, heads for weekly gain on US-Iran fight

Oil prices surged on Friday, positioning themselves for the steepest weekly gain since mid-July as heightened tensions between the U.S. and Iran fueled concerns over Middle East supply risks. Brent crude futures increased by 15 cents, or 0.2%, to $95.67 a barrel, while U.S. West Texas Intermediate crude futures rose by 26 cents, or 0.3%, to $91.56. Over the past week, Brent rose by 7.1% and WTI saw a 9.8% increase, marking the highest gains since the week of July 20.

Escalating hostilities between the two nations reached their fiercest point this week, with U.S. attacks that resulted in the deaths and injuries of dozens of people, including Iranian civilians. These clashes were the most intense between the two countries since July. The war, which began with U.S.-Israeli strikes at the end of February, has now entered its seventh month.

Israeli Defence Minister Israel Katz issued warnings that Israel would dismantle Iran's military and civilian infrastructure, including energy facilities. Meanwhile, U.S. Vice President JD Vance stated that Washington has no intention of engaging in talks with Iran unless Tehran ceases its attacks on commercial shipping in the Strait of Hormuz.

Russian President Vladimir Putin mentioned on Thursday that there is still a possibility for a deal to end the war in Ukraine, stating that both the U.S. and China are willing to support a peace settlement. However, Iran has expanded its list of vessels it considers non-compliant and subject to penalties, fines, confiscation, or detention if they attempt to transit the Strait of Hormuz. Iraqi ships remain among the few vessels Tehran has approved to pass through the strait.

Iraq's oil exports surged to around 2.34 million barrels per day in August, up from approximately 1.35 million barrels per day in July. Two Iraqi energy officials revealed this information on Wednesday, with September exports also expected to increase. The growth in exports is attributed to heavy discounts and Iranian approvals for Iraqi tankers, which have encouraged buyers.