(Bloomberg) -- Oil retreated after a three-day rally as risk-off sentiment swept across broader markets, but US President Donald Trump’s escalating threats against Iran is keeping the market on edge.

Brent fell below $70 a barrel on Friday after climbing above that level in the previous session for the first time since July, while West Texas Intermediate slid toward $64. Equities dropped in Asia, while the dollar strengthened, making commodities priced in the currency less attractive for many buyers.

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“Given Trump’s recent rhetoric, one would have to be fairly brave to head into the weekend short the market,” said Warren Patterson, head of commodities strategy at ING Groep NV in Singapore, referring to Iran.

Brent is set for the biggest monthly gain since 2022 on Trump’s continued Iran focus, despite widespread expectations swelling supply would put downward pressure on prices. Traders have flocked to the options market, and Citigroup Inc. predicts the risk premium for Brent is around $7 to $10 a barrel.

The US president’s messaging has shifted from punishing Tehran for its deadly crackdown on protesters, to this week extracting a new nuclear agreement. That threat carried more weight after Trump ordered naval assets to the region, with an aircraft-carrier strike group recently arriving in the Middle East.

Market concerns are primarily focused on how any fallout from an escalation in tensions could impact shipping through the Strait of Hormuz, a narrow passage separating Iran and the Arabian peninsula. Tankers carrying crude and liquefied natural gas transit through the strait daily to deliver cargoes worldwide.

The Associated Press reported that Iran issued a warning to ships at sea on Thursday that it planned to run a drill on Sunday and Monday that would include live firing in the strait, citing two Pakistani security officials.

Members of OPEC+ will gather online on Sunday to review supply policy for March — with expectations for the group to stick with a pause — and investors will be watching for any commentary regarding the Iran. The Islamic Republic is the fifth-biggest producer in the alliance, when including Russia.

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