Oil prices remained largely flat in Asian trading on Friday, as the market digested recent supply concerns stemming from drone strikes in Iraq. The previous day’s gains, driven by fears of disruption in Iraqi Kurdistan, were not enough to reverse an overall bearish weekly trend.
By 21:56 ET (01:56 GMT), September Brent crude hovered at $69.51 per barrel, while WTI crude held at $67.51, both unchanged from the prior session. On Thursday, prices had climbed more than 1.5% but were still tracking losses of over 1% for the week.
Geopolitical Tensions Fuel Supply Risks
Thursday’s rally was underpinned by fresh attacks on oil installations in Iraqi Kurdistan, which temporarily knocked out nearly half of the region’s production. The strikes, allegedly carried out by Iran-aligned militias, renewed concerns over Middle Eastern output security.
Despite the unrest, Baghdad announced a tentative agreement to restart crude exports from Kurdistan to Turkey after a two-year pause. While the Kurdistan Regional Government has yet to formally confirm the arrangement, the move points to progress in negotiations between federal and regional authorities.
U.S. Policy Shift Weighs on Market Outlook
Earlier support for oil prices from the possibility of new U.S. sanctions on Russia faded after President Donald Trump opted to give Moscow a 50-day window to wind down the war in Ukraine. The softer stance defused expectations of imminent restrictions, which had helped push prices higher last week.
Inventory Draw Signals Tight Supply
Fresh data from the U.S. Energy Information Administration showed a surprise inventory draw of 3.9 million barrels, far exceeding the 1.8 million-barrel drop forecast by analysts. The report reinforced views that underlying market conditions remain tight.
In addition, the International Energy Agency (IEA) recently noted that supply-demand dynamics could be tighter than headline figures suggest, as global refinery activity picks up to meet summer fuel demand.
Despite a recent increase in production quotas from OPEC+, both the IEA and OPEC continue to project stable demand growth through 2025 and 2026, pointing to a cautiously optimistic outlook for crude markets.
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