SINGAPORE: Oil prices rose on Friday as heightened tensions in the Middle East raised the risk of supply disruptions from the oil-producing region, though prices are set for weekly losses amid expectations of fewer U.S. interest rate cuts this year.

Brent crude futures climbed 75 cents, or 0.84%, to $90.49 a barrel by 0630 GMT, while U.S. West Texas Intermediate crude futures rose 87 cents, or 1.02%, to $85.89.

The gains erased the losses from the previous session, which was dominated by worries about stubborn U.S. inflation that dampened hopes for an interest rate cut as early as June.

Suspected Israeli warplanes bombed Iran's embassy in Damascus in a strike for which Iran has vowed revenge, ratcheting up tensions in a region already strained by the Gaza war.

Israel has not said it was responsible but Iran's supreme leader, Ayatollah Ali Khamenei, said on Wednesday Israel "must be punished and it shall be" for the attack.

The U.S. expects an attack by Iran against Israel but one that would not be big enough to draw Washington into war, according to a U.S. official. Iranian sources said that Tehran has signalled a response aimed at avoiding major escalation.

Israel is keeping up its war in Gaza but is also preparing for scenarios in other areas, Prime Minister Benjamin Netanyahu said on Thursday.