Oil markets saw a volatile trading session on Friday, with prices swinging between gains and losses as investors weighed the impact of potential U.S. retaliatory tariffs against broader supply concerns stemming from stricter policies on Iran.
West Texas Intermediate (WTI) crude continued its downward trend, closing in negative territory for the fourth consecutive week. Meanwhile, Brent crude managed to stay slightly positive, narrowly breaking a three-week losing streak.
Oil prices initially rose by as much as 1% on Friday following comments from U.S. Treasury Secretary Scott Bessent, who reaffirmed the administration’s commitment to significantly curbing Iran’s oil exports. “We are committed to bringing the Iranians back to 100,000 barrels per day of exports, as when Trump left office,” Bessent told Fox Business.
This statement comes just days after the U.S. imposed its first sanctions under the current administration, targeting Iranian entities, oil tankers, and individuals involved in Tehran’s energy sector.
The prospect of tighter restrictions on Iranian oil exports fueled supply concerns, briefly pushing prices higher before market sentiment shifted.
Despite supply worries, the possibility of an escalating trade war tempered oil’s gains. On Thursday, President Trump signed a plan for reciprocal tariffs but opted to delay its implementation while negotiations take place on a case-by-case basis with individual countries.
This move follows new tariffs imposed on select Chinese products last week, which prompted Beijing to retaliate with duties on American goods. Analysts warn that heightened trade tensions could weaken global demand, which in turn would put downward pressure on oil prices.
“The demand picture remains uncertain in the near term, as the retaliation of even higher U.S. tariffs may hamper global consumption,” noted Dennis Kissler, senior vice president at BOK Financial.
Another factor influencing oil prices this week was speculation over a possible truce in the Ukraine-Russia war. President Trump recently stated that both nations’ leaders are open to peace discussions, leading analysts to consider the potential market impact.
“While a comprehensive peace agreement may still be out of reach, even a ceasefire is enough for the market to start pricing in its effects,” wrote Natasha Kaneva, head of commodities research at JPMorgan, in a recent client note.
Despite the ongoing geopolitical and economic uncertainty, JPMorgan has maintained its 2025 Brent crude price forecast at an average of $73 per barrel, expecting a surplus in supply.
Looking further ahead, the bank predicts that Brent could drop below $60 per barrel by the end of 2026, with an annual average price of around $61. Currently, WTI crude is slightly down for the year, while Brent has gained just under 1% since January