Oil prices climbed on Friday and were poised to record their first weekly increase in three weeks, as rising geopolitical friction between the United States and Iran fueled concerns about potential supply disruptions. The gains followed Washington’s warning that Tehran would face consequences within days if it failed to reach an agreement on its nuclear programme.
Brent crude futures added 33 cents, or 0.5%, to trade at $71.99 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 62 cents, or 0.9%, to $67.05 as of 0715 GMT.
“Crude oil prices have edged to six-month highs as concerns over potential supply risks from the Strait of Hormuz keep markets on edge,” said Phillip Nova senior market analyst Priyanka Sachdeva.
On Thursday, U.S. President Donald Trump warned that “really bad things” would happen if Iran does not reach a deal regarding its nuclear activities, which Tehran maintains are peaceful but which Washington views as militarily oriented. Trump set a 10- to 15-day deadline.
At the same time, Iran announced plans for joint naval drills with Russia, according to local media, shortly after temporarily closing the Strait of Hormuz for military exercises.
Iran borders the Strait of Hormuz opposite the oil-rich Arabian Peninsula, and roughly 20% of global oil supplies transit through the narrow waterway. Any escalation in the region could restrict shipments to international markets and drive prices higher.
“Market focus has clearly shifted to escalating Middle East tensions after the failure of multiple rounds of U.S.-Iran nuclear talks, even as investors debate whether any actual disruption will materialise,” Sachdeva added.
Oil was also supported by signs of tightening inventories in major producing nations.
U.S. crude stockpiles fell by 9 million barrels last week, as refinery utilization rates and exports increased, according to data released Thursday by the Energy Information Administration.
Still, gains were tempered by uncertainty surrounding U.S. interest rate policy, given the country’s role as the world’s largest oil consumer.
“Recent Fed minutes pointing to steady rates or even the risk of further hikes if inflation stays sticky could cap demand,” said Phillip Nova’s Sachdeva.
Lower borrowing costs are typically seen as supportive for oil demand and prices.
Investors are also assessing the implications of ample global supply, amid indications that OPEC+ may move toward restarting output increases beginning in April.
The oil surplus observed in the second half of 2025 carried into January and “is likely to persist”, JP Morgan analysts Natasha Kaneva and Lyuba Savinova wrote in a note to clients.
“Our balances continue to project sizable surpluses later this year,” they said, adding that production cuts of around 2 million barrels per day would be required to prevent excessive inventory builds in 2027.
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