Oil jumped more than 2% before paring gains on Friday on a report Iran may be preparing an attack against Israel, a move that puts the market focus back on escalating tensions between Tel Aviv and the oil producing country.

West Texas Intermediate (CL=F) futures rose to hover above $70 per barrel while Brent (BZ=F), the international benchmark, traded just below $74.

The upward move came after an Axios report said Israeli intelligence believes Iran may be preparing a retaliatory attack through its allies in the coming days.

"The attacks may be sent from Hezbollah; however, Iran will still be named if major damage occurs," Dennis Kissler, senior vice president at BOK Financial, said in a note to clients on Friday.

"Still, many analysts think they may wait until after the US elections," he added.

Despite Friday's upward move, oil is still headed for a weekly loss after futures plunged more than 6% on Monday in their biggest daily drop in more than two years after an Israeli strike against Iran over the weekend spared the country’s petroleum infrastructure.

Also on the geopolitical front, a Ukrainian drone fell on an oil depot in Russia in what appears to be the the second attack in two days against Russian energy targets.

On Thursday prices rose after Reuters reported the Organization of Petroleum Exporting Countries and its allies (OPEC+) may decide to again delay the unwinding of voluntary production cuts, slated to start in the December.

The move to reintroduce barrels into the market has been postponed in recent months as Brent has failed to stay above $80 mark for a prolonged period of time since August.

On Friday Brent was down roughly 1% year-to-date, while WTI was flat during the same time period.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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