The global oil benchmark eased from the highest levels since mid-2022 as President Donald Trump said he was considering “winding down” US military efforts against Iran, weeks into a conflict that has upended global energy markets.
Brent settled above $112 a barrel, bringing this week’s gains to about 9%. Prices eased to trade near $108 a barrel in thin post-settlement trading on Trump’s comments.
Still, the Strait of Hormuz, through which 20% of global oil transits, is all-but-closed, and Trump on Friday urged other nations to secure the vital waterway and said it would need to be “guarded and policed” by the countries who use it.
Some traders saw the late-Friday comments from Trump as reversing earlier signs of further escalation in the conflict. The post-market move risks catching investors who piled into bullish bets off guard.
Earlier on Friday, CBS News reported that Pentagon officials made preparations for a possible deployment of US ground troops into Iran. The report, which cited unnamed sources, said it was an option and it was unclear under what circumstances Trump would authorize such an operation.
Meanwhile, US officials said the White House is sending hundreds of Marines to the Middle East as it weighs a plan to seize Iran’s Kharg Island oil export hub. Deploying even a small number of troops on the ground in Iran carries huge risks for US President Donald Trump and threatens retaliation from Tehran with attacks on critical energy infrastructure.
Prices also moved following a Bloomberg report that Iranian officials have become reluctant to even discuss reopening the Strait of Hormuz as they focus on surviving the US-Israeli onslaught.
Crude is closing out another volatile, headline-driven week, with strength into the weekend as traders trim short exposure,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.
“Today’s move higher reflects worsening rhetoric from Iran, limited evidence of flows through the Strait, and unconfirmed reports that Kharg Island could be in play alongside increased military positioning in the region,” she added.
Investors had piled into bets on more price gains. Money managers have increased their bullish ICE Brent crude oil bets by 77,672 net-long positions to 428,704, weekly ICE Futures Europe data on futures and options show. The figures, which were as of Tuesday, show the strongest bullish stance in more than six years.