Brent oil prices closed higher this week due to Iran-US tensions
Concerns about supply risks across the Strait of Hormuz persist. Oil prices are hovering near a six-month high. Brent oil prices rose towards the end of Friday as investors, fearing US military intervention, closed short positions following Trump's pressure on Iran to halt its nuclear weapons development.
Brent futures rose 10 cents a barrel, or 0.14%, to $71.76, while WTI crude fell 4 cents a barrel, or 0.06%, to $66.39.
For much of Friday, Brent and WTI oil prices were lower, with the market awaiting developments in the conflict between Iran and the US.
The oil market largely ignored the US Supreme Court ruling that Trump's imposition of tariffs during national emergencies was unconstitutional. There is a belief that tariffs will be resolved in other ways. The US Supreme Court's tariff decision has had little impact on crude oil.
Brent and WTI oil prices rose more than 5% throughout the week.
Iran's Foreign Minister said on Friday that despite the possibility of Trump attempting limited military strikes, he expects a draft counter-offer to be prepared within days following this week's nuclear talks.
The Strait of Hormuz, through which approximately 20% of global oil supply passes, is Iran's and the oil-rich Arabian Peninsula's sea route to the world. Conflict in the region could limit oil access to the global market and drive up prices.
Investors and traders have recently increased their call options on Brent oil, betting on higher prices.
Markets were previously assessing the impact of abundant supply, with talk of OPEC+ tending to resume oil production increases from April onwards. The oil surplus seen in the second half of 2025 continued in January and is expected to continue, but now we are talking about other things.
By now, falling crude oil inventories and limited exports in the world's largest oil-producing and exporting countries were also among the factors supporting oil prices.
According to a report released Thursday by the U.S. Energy Information Administration (EIA), U.S. crude oil inventories fell by 9 million barrels due to increased refinery use and exports.
However, analysts, who predict a significant surplus later this year, stated that a 2 million barrel per day production cut would be needed to prevent excessive inventory buildup in 2027.
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