Oil prices paused on Friday in Asian trading hours, holding on to recent gains fueled by escalating tensions in Iraq but still on track for a weekly loss as geopolitical and supply-side uncertainties persist.
As of 21:56 ET (01:56 GMT), Brent crude futures for September delivery remained stable at $69.51 per barrel, while WTI crude also traded flat at $67.51. The two benchmarks rose over 1.5% on Thursday following renewed concerns over supply disruptions in the Middle East.
Drone Attacks on Iraqi Oil Fields Raise Alarm
A series of drone strikes on oil infrastructure in Iraqi Kurdistan this week have disrupted roughly half of the region’s production capacity. The attacks, reportedly launched by Iran-linked militias, heightened fears of supply shortfalls from an already fragile region.
Despite the violence, Iraq’s central government announced progress in negotiations to resume oil exports from the Kurdish region to Turkey, signaling possible near-term relief in supply flows that had been suspended for nearly two years.
Market Reacts to Trump’s Softer Line on Russia
Oil’s weekly losses were exacerbated by a shift in tone from U.S. President Donald Trump, who chose to delay punitive measures against Russia, easing immediate fears of fresh sanctions. Trump has given Moscow 50 days to de-escalate its involvement in Ukraine, cooling the geopolitical premium that lifted prices late last week.
U.S. Inventory Draw Highlights Tightness
Further bolstering crude prices midweek was EIA data showing a larger-than-expected drop in U.S. crude inventories — 3.9 million barrels versus the anticipated 1.8 million. The draw reflects tightening supply dynamics, especially as refineries ramp up output to meet robust summer demand.
The IEA recently suggested the oil market remains tighter than it appears, even after OPEC+ surprised with a higher output target. Meanwhile, OPEC’s latest report maintained demand projections through 2026, citing expectations of easing trade tensions and resilient consumption patterns.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.