NYMEX April West Texas Intermediate settled near $66.15 per barrel, while ICE Brent crude hovered around $71.35. The modest retreat follows a significant rally triggered by geopolitical instability. While prices cooled during midday trading, the underlying market sentiment remains bullish, supported by a risk premium that analysts say is currently baked into every barrel.

Escalating Tensions in the Gulf

The primary catalyst for the week’s price action is the looming possibility of a U.S. military strike. President Trump signaled a narrow 10-to-15-day window for Tehran to negotiate a new nuclear deal, coinciding with the deployment of a second U.S. aircraft carrier to the region. According to a report from The Wall Street Journal, the administration is considering a limited strike to force diplomatic concessions. In response, Iran conducted joint military exercises with Russia near the Strait of Hormuz, a critical chokepoint responsible for roughly 20% of global oil transit.

"The increasing threat of war and associated risks to supply point to a rising risk premium," noted Carsten Fritsch, an oil analyst at Commerzbank. Meanwhile, regional dynamics saw Pacific Northwest gasoline prices drop by 20 cents as the market adjusted following maintenance on BP’s Olympic Pipeline. Most other domestic cash products tracked the broader movement of NYMEX futures as the week drew to a close.