Oil Rises Amid Heightened Tensions in the Middle East, Despite Heading for Weekly Loss

Oil prices rebounded on Friday, buoyed by escalating tensions in the Middle East, which raised concerns about potential supply disruptions from the oil-producing region. However, despite the uptick, prices are on track for a weekly loss amid expectations of fewer interest rate cuts in the United States this year.

As of 0420 GMT, Brent crude futures climbed 51 cents, or 0.57 percent, to $90.25 per barrel, while US West Texas Intermediate crude futures rose 61 cents, or 0.72 percent, to $85.63.

These gains helped offset some of the losses from the previous session, which was dominated by concerns about US inflation, dampening hopes for an interest rate cut in June.

Tensions escalated further when suspected Israeli warplanes bombed the Iranian consulate in Damascus, prompting Iran to vow revenge. This incident added to the existing tensions in the region, particularly in the aftermath of the conflict in Gaza.

While Israel did not claim responsibility for the attack, Iranian Supreme Leader Ayatollah Ali Khamenei stated on Wednesday that Israel “must and will be punished” for the incident.

An American official indicated that the United States anticipates an Iranian attack on Israel, but it is not expected to be significant enough to draw Washington into a war. Iranian sources suggested that Tehran’s response would aim to avoid a major escalation.

Israeli Prime Minister Benjamin Netanyahu reiterated on Thursday that Israel is continuing its operations in Gaza while also preparing for potential scenarios in other areas.

Despite the recent uptick, oil prices are still poised for a weekly decline, with both Brent and West Texas Intermediate crude heading for a decrease of over one percent by 0420 GMT.