Oil Rises, Venezuela-Iran Supply in Focus
Oil prices rose for a second day on Friday and are poised to post a third weekly increase. This increase was driven by uncertainty over Venezuelan supply and growing market concerns about potential production disruptions in Iran due to the escalating situation.
In morning trading, Brent rose around 0.7% to US$62.39 per barrel, while WTI strengthened around 0.6% to US$58.11 per barrel. The day before, both benchmarks surged more than 3% after declining for two consecutive days.
Market participants believe that sanctions-related oil flow constraints and stable demand signals are currently able to offset concerns about oversupply in 2026. Geopolitical tensions are strengthening short-term bullish sentiment.
In Venezuela, prices were boosted after US President Donald Trump arrested Venezuelan President Nicolas Maduro last week and declared that the US would control the country's oil sector. The market is now focused on how Venezuela's oil stockpiled in storage will be sold and delivered in the coming days.
Several companies, including Chevron, global oil traders Vitol and Trafigura, and others, are reportedly vying for a U.S. government agreement to export Venezuelan oil. The U.S. government has also stated that it will control Venezuelan oil sales and revenues for an indefinite period.
Meanwhile, the situation in Iran is adding to supply concerns due to widespread civil unrest and reports of internet outages. However, analysts warn that rising global inventories and the looming oversupply could still limit the oil price rally unless geopolitical risks escalate further.
5 key points:
1. Oil rises for a second day and is heading for a third weekly gain.
2. Key drivers: Venezuelan supply risks and growing concerns about Iran.
3. Trump claims the U.S. will control Venezuela's oil sector, the market is focused on the oil storage sales scheme.
4. Chevron, Vitol, Trafigura, and others are vying for opportunities to secure Venezuelan oil export contracts.
5. Iran's unrest adds to risks, but global oversupply could still limit gains if the situation does not escalate. (asd)
Source: Trading Economics
