Oil headed for weekly gain on impact of Middle East tension and Hurricane Isaias

Oil prices are expected to rise for the week as geopolitical tensions continue to impact the market. Brent crude, the benchmark for two-thirds of the world's oil, saw a 0.82% decrease to $103.42 per barrel, while West Texas Intermediate (WTI) dropped 0.74% to $90.81 per barrel. Despite these declines, Brent is on track to post a weekly gain after settling over 4% higher on Thursday due to rising Middle East tensions.

Hurricane Isaias, moving towards the US Gulf coast, poses a threat to oil production and refining infrastructure. Approximately 63% of US Gulf oil production has been shut down as a precaution. The hurricane, expected to make landfall late Friday or early Saturday, could lead to heavy rain and flash floods, endangering around 500,000 barrels per day of capacity.

While ongoing tensions between Saudi Arabia and its allies, as well as the Houthis' attacks on Saudi Arabian targets, maintain elevated geopolitical risk in oil markets, US President Donald Trump has ruled out launching attacks on Iran before the midterm elections next month. This has temporarily eased supply concerns, as Iran remains in a "very bad condition" economically and militarily, according to Trump.

The US has imposed sanctions on 17 vessels involved in transporting Iranian crude oil and petroleum products, aiming to pressure Tehran amid the ongoing regional conflict.