Oil prices retreated from recent highs in Asian trading, as investors weighed the impact of Iran supply risks against a significant US inventory build. Geopolitical tensions in Iran have fueled fears of supply disruptions, pushing prices up earlier in the week. This was exacerbated by President Trump's warnings of potential military action and threats of tariffs on nations trading with Tehran.

The American Petroleum Institute reported a 5.3 million-barrel increase in US crude inventories, surpassing analysts' expectations. This buildup, coupled with rising gasoline and distillate stocks, suggests ample supplies, countering the upward pressure from Iran's unrest. Market focus now shifts to the Energy Information Administration's official figures, due later, which will confirm or contradict these trends.

The recent volatility underscores the delicate balance between geopolitical risks and supply fundamentals in the oil market. Investors are closely watching Iran's situation and US inventory data for clues on future price movements. The market's reaction to these factors will be crucial as traders navigate the uncertain landscape ahead.