RoydadNaft –  Oil prices increased on Friday, putting them on track for their first weekly gain in three weeks, as concerns mounted over the possibility of conflict between the United States and Iran. This follows Washington’s warning that Tehran would face consequences if it fails to reach an agreement on its nuclear activities within days.

According to Roydad Naft, Brent crude futures rose 33 cents, or 0.5%, to $71.99, while US WTI crude gained 62 cents, or 0.9%, to $67.05 (as of 07:15 GMT).

Priyanka Sachdeva, senior market analyst at Philip Nova, said: “Crude oil prices have approached six-month highs, as fears of potential supply risks in the Strait of Hormuz have kept markets on high alert.”

US President Donald Trump stated on Thursday that if Iran fails to reach an agreement on its nuclear programme (which Iran insists is peaceful but the US views as military), “really bad things” will happen. Trump set a deadline of 10 to 15 days.

Meanwhile, Iran is planning a joint naval exercise with Russia, having temporarily closed the Strait of Hormuz for military drills a few days earlier.

This major oil producer lies opposite the oil-rich Arabian Peninsula across the Strait of Hormuz, through which around 20% of global oil supply passes. Any conflict in the region could restrict global oil supplies and drive prices higher.

Sachdeva added: “Market focus has clearly shifted towards escalating Middle East tensions following the failure of several rounds of US-Iran nuclear talks, although investors continue to debate whether any actual disruption will materialise.”

In addition, reports of declining crude inventories and export constraints in the world’s largest oil-producing and exporting countries have supported prices.

US crude inventories fell by 9 million barrels, driven by higher refinery runs and exports, according to the Energy Information Administration report released on Thursday.

Concerns over the path of US interest rates — the world’s largest oil consumer — prevented further gains.

Sachdeva from Philip Nova noted: “Recent Federal Reserve minutes, which point to steady rates or even the risk of further increases if inflation persists, could curb demand.”

Lower interest rates are generally seen as supportive for crude oil prices.

Markets are also weighing the impact of abundant supply, with reports indicating that OPEC+ is leaning towards resuming oil production increases from April.

JP Morgan analysts Natasha Kaneva and Lyubov Savinova wrote in a client note that the oil surplus evident in the second half of 2025 has continued into January and “is likely to persist”.

They added: “Our balances still forecast a significant surplus for the latter part of this year,” stressing that this would require production cuts of 2 million barrels per day to prevent inventory build-up in 2027.