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(Bloomberg) — Oil fell after its first back-to-back weekly decline this year as traders weighed the potential next steps from Iran and Israel amid simmering tensions in the Middle East.

Brent slipped below $87 a barrel after losing 3.5% last week, the biggest drop since early February. There’s an uneasy calm over the market after prices whipsawed on Friday, with Iran downplaying Israel’s response to the Islamic Republic’s unprecedented drone and missile strike on the Jewish state. 

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The US House has passed new sanctions on Iran’s oil sector following the hostilities, putting the measure on track to pass the Senate in days. The country also approved fresh funding for Ukraine in its war against Russia.

Money managers are the most bullish on Brent since March 2021 as they snap up contracts to profit from any spike higher amid heightened geopolitical risk. Other markets are also signaling bullishness, with oil call options — which profit when prices rise — trading at a premium over the opposing puts.

Oil is around 13% higher this year due to the geopolitical tensions and OPEC+’s supply cuts that have tightened the market. Investors will focus on a slew of US economic data this week, including the Federal Reserve’s preferred measured of inflation, which will give more clues on the path for monetary policy.

Earnings from the world’s largest oil majors including TotalEnergies SE, Chevron Corp. and Exxon Mobil Corp. are also due this week, as well as Asian companies Reliance Industries Ltd. and Cnooc Ltd.

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