Oil Prices Rise on Escalating U.S.–Iran Tensions, Set for First Weekly Gain in Three Weeks

PUKMEDIA

Oil prices.

Oil prices rose on Friday and were on course for their first weekly gain in three weeks, amid mounting concerns that tensions between the United States and Iran could escalate into conflict. The move followed Washington’s warning that Tehran would face consequences within days if it failed to reach an agreement on its nuclear activities.

According to Reuters report, Brent crude futures increased by 25 cents, or 0.4 per cent, to $71.91 a barrel, while U.S. West Texas Intermediate (WTI) crude rose by 31 cents, or 0.5 per cent, to $66.74 as of 04:37 GMT.

On Thursday, prices settled at a six-month high after U.S. President Donald Trump warned that “really bad things” would occur if Iran did not reach an agreement regarding its nuclear programme. Tehran maintains that its programme is peaceful, while Washington contends that it has military dimensions. President Trump reportedly set a deadline of between 10 and 15 days for progress to be made.

Meanwhile, Iran is reportedly planning joint naval exercises with Russia, according to local media, only days after temporarily closing the Strait of Hormuz for military drills.

Iran sits opposite the oil-rich Arabian Peninsula across the Strait of Hormuz, a critical maritime chokepoint through which approximately 20 per cent of global oil supplies pass. Any disruption in the region could constrain flows to international markets and place upward pressure on prices.

Further support for oil prices came from indications of tightening supply in major producing nations. In the United States, crude inventories fell by 9 million barrels, according to data released on Thursday by the U.S. Energy Information Administration, as refinery utilisation rates and exports increased.

However, markets are also weighing the impact of ample global supply, amid discussions that the OPEC+ alliance may move towards resuming output increases from April.



PUKMEDIA