Oil gains as market assesses potential disruption in Iran, dealmaking for Venezuela

LONDON: Oil prices rose on Friday on concerns about potential disruption to Iran’s output and uncertainty about supply from Venezuela.

Brent futures were up 43 cents, or 0.7%, to $62.42 per barrel at 1106 GMT, while U.S. West Texas Intermediate (WTI) crude was up 41 cents, or 0.7%, to $58.17.

Both benchmarks climbed more than 3% on Thursday, following two straight days of declines. For the week, Brent is on track to climb 2.8%, while WTI has gained 1.5%.

“Iran protests seem to be gathering momentum, leading the market to worry about disruptions,” said Ole Hansen, head of commodity analysis at Saxo Bank.

Civil unrest in major Middle Eastern producer Iran and concerns about the spread of the Russia-Ukraine war to Russian oil exports have increased supply concerns.

Meanwhile, the White House is set to meet with oil companies and trading houses on Friday to discuss Venezuelan export deals.

Trump has demanded that Venezuela give the U.S. full access to its oil sector just days after it captured the country’s president Nicolas Maduro on Saturday. U.S. officials have said Washington will control the country’s oil sales and revenue indefinitely.

Oil major Chevron Corp, global trading houses Vitol and Trafigura, and other firms are competing for U.S. government deals to market up to 50 million barrels of oil that state-run oil company PDVSA has accumulated in inventories amid a severe oil embargo that has involved four tanker seizures, two of the sources said.

“The market will focus on the outcome in the coming days for how the Venezuelan oil in storage will be sold and delivered,” said Tina Teng, market strategist at Moomoo ANZ.

A nationwide internet blackout was reported in Iran on Thursday, internet monitoring group NetBlocks said, as protests in the capital Tehran and the major cities of Mashhad and Isfahan and other areas around the country over economic hardships continued.

The Russian military said on Friday that it had fired its hypersonic Oreshnik missile at targets in Ukraine. The targets included energy infrastructure supporting Ukraine’s military-industrial complex, the Russian defence ministry said in a statement.

Still, global oil inventories are rising, and oversupply remains the main driver that could cap gains, Haitong Futures said. Unless risks around Iran escalate, the rebound is likely limited and hard to sustain.