Well, one unless your brother is under age, you don’t have much to handle. You should ask what the weirdness was about because there are a lot more steps before sleeping with one another that could be the issue. Don’t ever assume anything. It’s always best to ask questions and go from there. If this friend has been around the family for a long time it can be weird if your brother and friend do like each other. I get how weird it would come off, but be clear before you react. Do not assume the worse until you get confirmation.
If you do get the confirmation than speak how you feel. If everyone is grown remember that although awkward and although you feel upset or weird about it, everyone has choices to make. Grown people are going to be grown and do grown things and it doesn’t matter that you feel you are in the middle. Try not to blow up at either party. Control your emotions because in the heat of an argument you can’t take back words. So be sure that what you say is what you can stand on even after you have calmed down. I would even suggest not even talking about it right away until you are calm.