Oil prices rose as much as 3% on Thursday after Iran attacked several energy facilities across the Middle East following a strike on its South Pars gas field.
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U.S. oil prices extended their decline Friday after Treasury Secretary Scott Bessent said Washington may soon lift sanctions on Iranian crude stored aboard tankers, a move aimed at easing price pressures following Iran’s closure of the Strait of Hormuz.
Brent crude, the international benchmark, lost 1.62% to $106.89 per barrel. U.S. oil prices slid 1.89% to $94.32 per barrel as of 1:49 a.m. ET.
“In the coming days, we may unsanction the Iranian oil that’s on the water, about 140 million barrels,” Bessent told Fox Business Network.
He said bringing the sanctioned Iranian crude back into global markets would help cap prices over the next 10 to 14 days.
Israeli Prime Minister Benjamin Netanyahu also told reporters that Israel is assisting U.S. efforts to reopen the Strait of Hormuz, according to wire reports. He added that Iran no longer has the capability to enrich uranium or produce ballistic missiles, adding that the war could end sooner than many expect.
Citi said the Iran conflict has driven a sharp rally across oil and related commodities, prompting it to lift its near-term price outlook.
The bank now expects Brent and WTI to climb to $120 per barrel over the next one to three months, and to $150 per barrel in a bull-case scenario if disruptions intensify.
Still, its base case assumes de-escalation within four to six weeks, which would allow Brent to ease back to $70–$80 by year-end.
At the same time, key crude spreads have widened sharply, with Citi raising its Brent-WTI forecasts to reflect elevated freight costs and strong U.S. Gulf Coast demand for inland barrels.
Saudi oil officials expect crude prices could climb above $180 a barrel if Iran war disruptions last through late April, the Wall Street Journal reported.