Oil Prices Fall as Israel Signals Restraint
Crude retreated after Israel said the Iran war may end sooner and signaled no further strikes on Iran’s South Pars gas field, easing fears of deeper supply losses.
Oil prices fell sharply on Friday after Israeli Prime Minister Benjamin Netanyahu said the war with Iran could end sooner than expected and signaled that Israel would avoid further attacks on Iran’s key gas infrastructure. The move cooled a rally that had pushed crude to multi-month highs a day earlier.
Brent crude dropped back to about $105 a barrel, while U.S. West Texas Intermediate traded near $93, according to Reuters and other market reports published on Friday. The retreat followed Thursday’s surge, when Brent briefly topped $119 after Israel struck Iran’s South Pars gas field and Iran retaliated against energy assets across the Gulf.
Netanyahu told a press conference on Thursday that joint U.S.-Israeli action had badly damaged Iran’s strategic capabilities and said the campaign would end “faster than people think.” He also said President Donald Trump had asked Israel not to repeat attacks on Iranian gas facilities, a remark traders took as a sign that Washington wants to cap the energy shock even as the war continues.
That shift in tone mattered because the market had just endured one of its most violent risk repricings in years. Reuters reported that Iranian strikes damaged Qatar’s Ras Laffan complex, wiping out 17% of Qatar’s LNG export capacity for an estimated three to five years, according to QatarEnergy chief Saad al-Kaabi. The loss has tightened gas balances in Asia and Europe and reinforced fears that attacks could spread from gas into oil loading, refining and shipping networks.
The broader supply risk remains severe. The U.S. Energy Information Administration said the Strait of Hormuz carried an average 20 million barrels a day of oil in 2024, with 84% of the crude and condensate and 83% of LNG moving through the waterway headed to Asia.
China, India, Japan and South Korea were the biggest destination markets, making Asian importers especially vulnerable to any prolonged disruption.
That explains why financial markets have swung with every military and political headline. Reuters reported that Asian earnings and equities were already under pressure from the energy shock, with export-heavy North Asian markets seen as especially exposed to higher fuel and freight costs. On Thursday, U.S. stocks also fell before paring losses as crude pulled back from its intraday highs.
Washington is now trying to build a supply buffer around the crisis. U.S. Treasury Secretary Scott Bessent said the United States could authorize another release from the Strategic Petroleum Reserve and is also considering relief for some Iranian oil already afloat, steps aimed at easing immediate shortages and stopping a further jump in prices.
Media reported earlier that the International Energy Agency had already organized a coordinated release of more than 400 million barrels from emergency reserves.
The U.S. still has room to act. The Department of Energy said the Strategic Petroleum Reserve held 416 million barrels as of March 18, against an authorized capacity of 714 million barrels.
That is well below historic peaks, but still large enough to influence near-term physical balances and trader sentiment if barrels are released quickly.
Even so, the pullback in crude does not mean the market is calm. Reuters said infrastructure damage and shipping disruption remain unresolved, and the war has already choked normal traffic through Hormuz.
Other reports this week described vessel movements through the strait falling sharply, a reminder that benchmark prices can fall on headline relief even when physical logistics stay badly impaired.
The latest volatility is hitting a market that was already facing slower demand growth. In its March 2026 Oil Market Report, the IEA cut its forecast for global oil demand growth this year to 640,000 barrels a day, down 210,000 barrels a day from the previous month.
That softer demand outlook may help limit upside in prices, but it does little to offset sudden wartime supply losses in the Gulf.
For now, traders are balancing two competing forces. One is the risk that Israel, Iran or allied forces strike more energy infrastructure and send crude sharply higher again.
The other is a coordinated effort by Washington and its allies to add barrels, reopen shipping lanes and keep the conflict from spilling deeper into oil production and exports.
Read More: Maintaining Oil Prices to hit oil industry’s cash flow
That leaves oil falls as Israel signals restraint as the dominant market theme at the end of the week, but only in the narrowest sense.
Crude has come off its panic highs, yet prices remain elevated, Gulf infrastructure remains under threat, and the outlook for Oil falls as Israel signals restraint will still depend on whether military de-escalation proves real over the coming days.