Crude oil markets extended their gains into a second consecutive session on Friday, positioning benchmarks for a third successive weekly advance. The upward momentum is underpinned by mounting geopolitical uncertainties, particularly regarding the stability of supply from two key producers: Venezuela and Iran. Brent crude futures advanced by forty-four cents, (0.7%), to reach USD 62.43 per barrel, while U.S. West Texas Intermediate crude increased by thirty-nine cents, (0.68%) to USD 58.15 per barrel. This follows a substantial rally of over three percent during the previous trading session, which reversed two days of prior declines. For the week, Brent is poised to secure a gain of 2.7%, with WTI accumulating a 1.4% increase.
The recent price appreciation is largely attributable to heightened supply concerns stemming from political developments. The seizure of Venezuelan President Nicolás Maduro by U.S. authorities last week and subsequent assertions from President Donald Trump that the United States would assume control of the country’s oil sector have introduced significant uncertainty into the market. Analysts note that this shift could lead to a recalibration of prices for Venezuelan crude, which has historically been sold at a discount. Furthermore, civil unrest in Iran, a major Middle Eastern producer, and persistent anxieties that the conflict between Russia and Ukraine may increasingly target Russian oil export infrastructure have compounded supply-side apprehensions.
Oil Inventories and Commercial Negotiations
Market strategist, Tina Teng observed that the price surge is directly linked to the potential U.S. intervention in Venezuela’s oil exports. This sentiment is reflected in reported commercial activity, as firms including Chevron Corporation and global trading houses Vitol and Trafigura are reportedly competing for U.S. government authorizations to export crude from Venezuelan inventories. According to sources familiar with the negotiations, these initial deals concern the marketing of up to fifty million barrels of oil accumulated by state-run PDVSA. Teng further emphasized that the market’s focus will now be on the logistical and commercial terms governing the sale and delivery of this stored oil, warning that oversupply concerns could resurface without limitations on sales volumes.
Concurrently, a nationwide internet blackout in Iran amid ongoing protests over economic conditions has heightened vigilance regarding potential disruptions to production. While domestic authorities have warned suppliers against hoarding and price gouging, the situation contributes to a risk premium in global markets. However, analysts caution that this rebound, partly a correction after earlier underestimation of geopolitical risks, may face headwinds. They note that rising global inventories and persistent oversupply dynamics remain the predominant market drivers, likely capping further gains. The firm concluded that unless the situation in Iran escalates significantly, the current price recovery may prove limited and difficult to sustain over the medium term.
