Crude Oil Prices Rise on Friday Amid U.S.-Iran Tensions and Supply Concerns

Crude oil prices moved higher on Friday as concerns over escalating tensions between the United States and Iran intensified. 

Brent crude futures rose 21 cents, or 0.3%, to $71.87 per barrel, while U.S. West Texas Intermediate crude gained 23 cents, or 0.4%, to $66.66 per barrel. 

Prices had already settled at their highest level in six months in the previous session after U.S. President Donald Trump warned that Iran would face severe consequences if it failed to reach a nuclear agreement within 10 to 15 days. 

While Iran maintains that its nuclear program is peaceful, the U.S. has expressed concerns over its potential military dimensions.

Strait of Hormuz and Supply Risks in Focus

Adding to market anxiety, Iran reportedly planned joint naval exercises with Russia, shortly after temporarily closing the Strait of Hormuz for military drills. The Strait of Hormuz is a crucial transit route through which roughly 20% of the world’s oil supply passes. 

Any disruption in this region could significantly restrict global oil flows and push prices higher. The geopolitical backdrop has therefore heightened fears of supply constraints in an already sensitive market.

Inventory Declines and Export Data Support Prices

Further supporting oil prices were fresh data indicating tightening supplies. U.S. crude inventories fell by 9 million barrels, driven by higher refinery utilisation and stronger exports, according to the Energy Information Administration. 

Meanwhile, oil exports from Saudi Arabia declined to 6.988 million barrels per day in December, the lowest level since September, based on data from the Joint Organizations Data Initiative.

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Conclusion

Rising geopolitical tensions, falling crude inventories, and reduced exports from major producers have combined to lift oil prices. With the Strait of Hormuz remaining a critical chokepoint and diplomatic negotiations uncertain, markets are likely to stay sensitive to further developments in the coming days.

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