Oil Prices Slip 1% on US–Iran Tensions, Yet Clock Strongest Monthly Gains in Years

Market Performance: Oil Prices Cool Off After Sharp Rally

Oil prices eased on Friday after a powerful rally pushed them to multi-month highs in the previous session. The pullback came even as geopolitical tensions stayed elevated in the Middle East.

• Brent crude slipped 91 cents, or over 1%, to $69.80 per barrel
• The April Brent contract, which is more actively traded, fell $1.07 to $68.52
• U.S. West Texas Intermediate (WTI) dropped $1.06 to $64.36 per barrel

This decline followed a strong 3.4% jump on Thursday, when both benchmarks settled at their highest levels in several months.

Despite Friday’s dip, oil prices remain firmly on track for their strongest monthly gains in years.

Main News: Why Oil Prices Fell Despite Rising Tensions?

The immediate weakness in oil prices appears to be a classic case of markets pausing after a sharp surge.

Prices had climbed rapidly on fears that a potential U.S. strike on Iran could disrupt oil flows, especially through the Strait of Hormuz, a critical route for global energy supplies.

So far, those fears have not translated into actual supply disruptions. As a result, traders booked profits after the rally, leading to a modest correction.

At the same time, the U.S. dollar strengthened on Friday. A firmer dollar typically adds pressure on oil prices, as crude becomes more expensive for non-U.S. buyers.

Geopolitical Tensions Keep Risk Premium Alive

While prices softened, the broader risk backdrop remains tense.

• The U.S. has increased military presence in the Middle East
• The U.S. President warned Iran about military action if no nuclear agreement is reached
• Iran responded with warnings of strong retaliation

In parallel, high-level discussions involving U.S., Israeli, and Saudi officials have taken place in Washington, focused on Iran. However, no final decision has been taken on any military action.

This uncertainty has kept a risk premium embedded in oil prices, even as day-to-day volatility increases.

Monthly Picture: Oil Prices Head for Biggest Gains in Years

Zooming out, the bigger story is the monthly performance.

• Brent crude is up 14.7% for the month
  • Its sharpest monthly rise since January 2022
• WTI crude has gained around 12%
  • The biggest monthly jump since July 2023

This marks the first monthly gain for both benchmarks in six months, underscoring how quickly sentiment has shifted in the oil market.

Geopolitical uncertainty, supply concerns, and sudden shifts in risk appetite have all played a role in driving prices higher over the past few weeks.

Summary: Oil Prices Volatile, But Monthly Trend Remains Strong

Oil prices may have slipped over 1% on Friday, but the broader trend still tells a story of strength.

After racing to multi-month highs, the market paused as immediate supply fears failed to materialise. Yet, ongoing U.S.–Iran tensions and geopolitical uncertainty continue to support prices at elevated levels.

With double-digit monthly gains, crude oil has delivered one of its strongest performances in years—highlighting how quickly global risks can reshape energy markets, even without an actual disruption on the ground.

Source: Livemint