Oil prices fall, but barely, as the U.S. and Israel try to ease disruption from the Iran war

Crude oil prices remained elevated Friday despite Treasury Secretary Scott Bessent signaling that the U.S. is weighing sanctions relief on Iranian oil stranded at sea, a potential buffer against prices that have spiked since Iran shut the Strait of Hormuz.

Bessent told Fox Business Network on Thursday that the U.S. is considering unsanctioning roughly 140 million barrels of Iranian oil currently sitting on tankers. Bessent said the release could hold down prices for roughly the following two weeks.

Brent crude futures were largely flat Friday morning, trading at about $109 a barrel after rising to almost $120 on Thursday. WTI futures were trading at about $96 a barrel.

According to wire reports, Israeli Prime Minister Benjamin Netanyahu told reporters that Israel is working with Washington to restore navigation through the Strait of Hormuz. He described Iran as having been stripped of both its uranium enrichment capacity and its ability to manufacture ballistic missiles, and said an end to the fighting may arrive ahead of schedule.

Citi raised its near-term oil forecast, citing the conflict's broad impact on energy markets, according to CNBC. Citi's base forecast puts both Brent and WTI at $120 a barrel within a one-to-three-month window, with a worst-case path to $150 if the conflict deepens. If tensions cool within a month or two, the bank sees Brent retreating to the $70–$80 range before the year closes. The bank also widened its Brent-WTI spread outlook, pointing to rising shipping costs and robust appetite for domestic U.S. inland crude.

If fighting and supply disruptions persist into late April, Saudi energy officials believe oil could top $180 a barrel, The Wall Street Journal reported.

Earlier this week, Iran struck energy infrastructure across the Gulf, with Ras Laffan — the Qatari industrial zone home to the world's single largest LNG export capacity — absorbing the most consequential hit, alongside refineries in Saudi Arabia and Kuwait. Thursday's session pushed Brent to $119 a barrel, a gain of about 65% over the month.

The Gulf strikes came after Israel hit Iran's South Pars gas field. Repairs at several of the affected sites may take months to complete. Analysts have noted that the trajectory for energy prices hinges on two variables: whether the Strait of Hormuz reopens and how long it takes to restore damaged production capacity, The Journal reported. Rystad Energy put the potential refining loss at a minimum of 700,000 barrels per day in a scenario where Iran struck every facility it has targeted.

To soften the impact on domestic consumers, Washington has tapped the Strategic Petroleum Reserve and President Donald Trump issued a temporary waiver of the Jones Act.