Brent crude prices fall as US delays decision on military action on Iran

Brent crude prices fell significantly by nearly $2 on Friday after the White House postponed its decision regarding US involvement in the ongoing Israel-Iran conflict. Brent futures decreased $1.89, or 2.4%, to $76.96 per barrel by 0255 GMT. Despite this drop, prices are poised for a third consecutive week of gains, with a 3.8% increase over the week. The US West Texas Intermediate (WTI) crude for July showed a slight rise, up 53 cents or 0.7% to $75.67, while the more liquid WTI for August increased slightly by 17 cents to $73.67.

Recent escalations in the conflict, including Israel bombing nuclear targets in Iran and retaliatory missile strikes from Iran, have heightened market volatility. The conflict, which has now persisted for a week, shows no signs of de-escalation, and Iran remains a significant contributor to OPEC, producing about 3.3 million barrels per day.

The Strait of Hormuz, a critical chokepoint for oil transport, sees the movement of approximately 18 to 21 million barrels per day. Concerns remain that the conflict could disrupt this vital trade route.

In a note, YES Securities said there was very less impact expected on the oil market from the ongoing Iran-Israel conflict. 

"While some loss of Iranian oil exports (approx. 1.5mbpd) is possible, OPEC’s 4 mbpd spare capacity and a pre-conflict global surplus of 0.9 mbpd offer ample supply cushion. The Strait of Hormuz remains open despite threats, and additional buffers like US strategic reserves and flexible shale output further support market stability. Hence, oil markets are unlikely to face a sustained supply shock," the brokerage said.