(Investing) – Oil prices oscillated around the flatline on Friday, after U.S. officials said Washington may soon lift sanctions on Iranian oil already at sea, freeing up more supplies.
Hopes for some de-escalation in the U.S.-Israel war on Iran had earlier weighed on crude. Helping underpin the sentiment were U.S. calls for Israel to hold off on future attacks against Iran’s energy infrastructure.
Brent oil futures, the global benchmark, last ticked down 1.1% to $109.87 a barrel. On Thursday, an attack by Israel on the South Pars gas field, the Iranian sector of the world biggest gas deposit, sent Brent to as high as around $119 a barrel.
But it came off its intraday peaks and closed lower after U.S. Treasury Secretary Scott Bessent said the U.S. may lift sanctions on Iranian oil already at sea– a move that he claimed could free up about 140 million barrels of supply.
The move is likely aimed at tempering a rally in oil prices. Before the start of the conflict in late February, Brent was exchanging hands at about $70 a barrel.
The U.S. and several major economies also outlined plans to release oil from their emergency reserves to calm markets fretting over the economic impact of prolonged oil price advances.
Adding to these concerns, several major central banks warned on Thursday that they could raise interest rates in the face of higher inflation stemming from rising energy prices.
Saudi Arabia sees oil hitting $180/bbl on prolonged Iran war – WSJ
Saudi Arabian officials see oil prices surging to $180 a barrel if the Iran oil shock extends beyond April, the Wall Street Journal reported on Thursday.
While such a spike points to higher revenues for major oil producers, it also threatens to greatly hurt global demand and economic growth, especially if oil becomes too expensive for international buyers.
Concerns over prolonged energy disruptions surged this week after Israel attacked South Pars– the world’s largest gas field, which Iran shares with Qatar.
The strike sparked bitter retaliation from Iran, with Tehran seen targeting several energy sites across the Middle East on Thursday. Iran’s revolutionary guard signaled no plans to de-escalate their attacks.
Iran also kept the Strait of Hormuz largely blocked, pointing to continued supply disruptions in oil and gas markets, especially for Asia.
(Ambar Warrick contributed reporting.)
