Oil Prices Retreat Amid Middle East Tensions

Oil prices retreated from above $100 on Friday but are still set for a significant weekly gain due to escalating tensions in the Middle East. Brent futures fell by $3.59, or 3.57%, to $97.10 a barrel, having briefly breached the $100 mark the previous day. The contract remains on track for a more than 10% advance this week.

The decline follows reports of Houthi strikes on two Saudi oil tankers in the Red Sea, as well as US President Donald Trump's promise of 'major military punishment' for Iran and its allies. Analysts point to the continued disruption to energy flows in the region as a key driver of prices.

Janiv Shah from Rystad said that tensions in the Middle East have driven prices up due to supply being squeezed once again, with current disruptions nearing peak levels seen in March. The Strait of Hormuz remains a major concern, with vessel transits steady at three per day over the past three days.