Oil prices hovered near six-month highs on Friday, heading for their first weekly advance in three weeks amid escalating U.S.-Iran tensions.
Brent crude slipped 0.35% to $71.41 a barrel, while U.S. West Texas Intermediate fell 0.45% to $66.13 by 1130 GMT.
Markets reacted after Washington warned Tehran of consequences if it fails to reach a nuclear deal within days, intensifying geopolitical risk.
Iran announced joint naval drills with Russia and recently closed the Strait of Hormuz for exercises, raising concerns over regional stability.
Around 20% of global oil supply transits the Strait of Hormuz, making any disruption a significant threat to international energy flows.
Options markets reflected bullish sentiment, with traders increasing call option positions on Brent, betting on further price gains.
Support also came from tighter supply signals, including a 9 million-barrel drop in U.S. crude inventories, alongside stronger refining activity and exports.
However, expectations of steady or higher U.S. interest rates and potential OPEC+ output increases could temper gains, as analysts warn of persistent oil surpluses later this year.
