Oil held near a six-month high after US President Donald Trump said he’s mulling a limited military strike on Iran and forces gather in the Middle East, warning Tehran had 15 days at most to reach a deal over its nuclear program.
West Texas Intermediate was little changed near $66 a barrel, notching a weekly gain of about 5.6%. Trump said on Friday “I guess I can say I am considering it,” when asked if he was weighing military force in Iran to secure a nuclear deal, raising concerns of potential disruptions to oil supply in the key region. Prices briefly flipped to positive after CNN reported that the USS Gerald R. Ford carrier strike group is on its way to the Middle East.
The US is carrying out the biggest military buildup in the region since 2003, before the invasion of Iraq. That suggests Trump may launch a far more sweeping campaign than the overnight attack against Iran’s nuclear program last June.
The OPEC member pumps more than 3 million barrels a day of crude, or about 3% of global output, and mainly exports to China. However, the key risk for oil prices is if Iran decides to blockade the Strait of Hormuz, a key conduit for energy exports from Persian Gulf producers.
A sustained campaign against Iran could see prices jump further, which would feed through to gasoline costs at the pump and potentially anger US voters ahead of midterm elections later this year.
“Despite this morning’s minor pullback, we continue to see room for further upside under the current geopolitical backdrop,” said Ole Hvalbye, an analyst at SEB AB.
The commodity also followed equities higher after the US Supreme Court struck down Trump’s sweeping tariffs, undermining a signature economic policy that had at one point stoked fears about the global economy and energy demand.
Oil has surged by about a sixth so far this year as traders gauge the risks to supplies from the Middle East, concerns that have eclipsed expectations of a building surplus that weighed on prices at the end of 2025.
Iran’s window to reach a diplomatic agreement over its atomic activities is at risk of closing, according to the head of the United Nations nuclear watchdog.
Oil timespreads are reacting to the increased risk. Brent’s one-year spread moved to the widest backwardation, a market structure that signals tighter near-term supply, since June. The six-month gap has also pushed further into backwardation. Options skews for both Brent and WTI are in a deeper bias toward bullish calls, signaling rising expectations for price gains.
At the same time, speculators such as hedge funds still have substantial scope to cover additional short positions and add to bullish bets in an adverse geopolitical scenario, potentially accelerating the rally, according to Dan Ghali, a commodity strategist at TD Securities.
Adding to the bullish momentum, US crude stockpiles fell by about 9 million barrels, the biggest drop since early September, weekly figures from the Energy Information Administration showed on Thursday. Oil product inventories also declined.
Oil Prices
WTI for April delivery rose 8 cents to settle at $66.48 a barrel.
The March contract expires Friday.
Brent for April settlement edged up 10 cents to settle at $71.76 a barrel.
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