Oil prices were little changed on Friday but kept on track for their steepest weekly gain since mid-July, as rising U.S.-Iran tensions heightened concerns over Middle East supply risks.
Fear of supply disruptions due to renewed hostilities between the United States and Iran, and attacks on Russian refineries by Ukraine, pushed average U.S. diesel prices to record highs.
Brent crude futures LCOc1 were flat at $95.52 a barrel by 0645 GMT, while U.S. West Texas Intermediate crude futures CLc1 climbed 7 cents, or 0.1%, to $91.36.
However, Brent rose 7.6% and WTI was 10.4% higher on a weekly basis, putting the benchmarks on track for the highest gains since the week ended July 20.
Middle East tensions and supply risks support prices
U.S. attacks this week that killed and wounded dozens, including Iranian civilians, marked the fiercest clashes between the two countries since July. The war is in its seventh month since beginning with U.S.-Israeli strikes in late February.
Israeli Defence Minister Israel Katz renewed warnings that Israel would "cripple" Iran's military and civilian infrastructure, including energy facilities.
ANZ analysts raised their Brent crude forecast on Friday to $95 a barrel in the short term, with upside risk if the Middle East conflict intensifies.
"The market is entering a delicate adaptation phase," they said in a note. "Elevated inventories helped absorb the initial supply crisis, but the challenge is now to keep the market balanced as those buffers diminish."
U.S. Vice President JD Vance told reporters on Thursday that Washington does not plan to hold talks with Iran unless Tehran stops attacking commercial shipping in the Strait of Hormuz.
Russia-Ukraine developments and Iraq exports cap gains
Capping oil's advance, however, Russian President Vladimir Putin said there remained a path to a deal to end the war in Ukraine, adding that both the United States and China were prepared to support a peace settlement.
Iran expanded its list of vessels deemed non-compliant and subject to fines, confiscation or detention if they attempt to transit the strait. Iraqi ships remain among the few vessels Tehran has cleared to pass through Hormuz.
Iraq increased its August oil exports to about 2.34 million barrels per day from about 1.35 million bpd in July, two Iraqi energy officials said on Wednesday.
September exports are also expected to increase, as heavy discounts and Iranian approvals for Iraqi tankers encouraged buyers, they added.
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