Global oil prices declined this week, even as tensions in the Gulf region threatened to disrupt supplies and President Donald Trump blamed Iran for a series of attacks on tankers in one of the world's busiest shipping lanes.

Trump told the "Fox and Friends" news program that attacks on two tankers in the Gulf of Oman has "probably got essentially Iran written all over it," citing video evidence that U.S. officials said was an Iranian patrol boat removing an un-exploded mine from the 'Kokuka Courageous' oil tanker on Friday. The Thursday attacks sent global crude prices sharply higher, but gains were pared the following day amid increasing concern that the U.S.-China trade war, alongside swelling global supplies, will hit both demand and prices in the months ahead.

 "Crude oil experienced a tug-of-war week with Mideast tensions only partly offsetting continued worries about global demand and rising US stocks," said Ole Hansen, head of commodity strategy at Saxo Bank ."With no end in sight for a solution to the US-China trade war, the global growth implications continue to negatively impact the outlook for crude oil, which hit a four-month low this week."

"The failure to build a geopolitical risk premium following the tanker attacks in the Gulf of Oman could indicate that the market is either sceptical of the narrative with regards to who did it, or that demand worries simply weigh too heavily at this stage," he added.

Brent crude contracts for August delivery, the global benchmark, climbed on Friday, but will close out the week with a 2% decline. 

WTI contracts for July, which are more tightly linked to U.S. gas prices, were marked 23 cents higher at $52.51 per barrel into the close of trading, after hitting the lowest levels in than five months on Wednesday, and will end the week 2.7% to the downside.

Gulf tensions certainly have the potential to send oil prices higher again next week, given that around a fifth of the world's oil passes through the nearby Strait of Hormuz, which separates the Persian Gulf states from Iran and the epicenter of military tensions between Washington and Tehran, each year.

Furthermore, OPEC members, as well as allies such as Russia, are likely to extend their pact to limit production, which is taking 1.2 million barrels of crude from the market each day, into the second half of the year when they meet later this month in Vienna.

However, with China's industrial economy running at the weakest pace in seventeen years, and U.S. drilling pumping a record 13 million barrel each day, the downdraft for global oil markets looks powerful.

U.S. oil prices have fallen more than 22% since late April, reversing a run that began on Christmas Eve and took prices to multi-year highs, as investors began to question the strength of global crude demand as the world's biggest economies saw slowing growth amid the ongoing U.S.-China trade dispute.

The International Energy Agency cut its 2019 demand growth forecast Friday to 1.2 million barrels per day, noting that "the main focus is on oil demand as economic sentiment weakens", and adding that a "worsening trade outlook" was a common theme around the regions it covered in its monthly outlook report.

Those views were echoed by the U.S. Energy Information Administration, which said Wednesday that U.S. supplies rose by 2.21 million barrels in the week ending June 7 to take the overall supply tally to 485.47 million barrels, the highest in nearly two years. 

The EIA also trimmed its forecast for world demand yesterday to around 1.22 million barrels per day in its regular Short-Term Energy Outlook report, a 160,000 reduction from its prior forecast. It also lowered its growth estimate for 2020 by 110,000 to 1.42 million barrels per day. 

OPEC's monthly report, which was published Thursday, also noted "significant downside risks from escalating trade disputes spilling over to global demand growth remain."