Oil prices rise on Trump’s Iran ‘armada’ comments and Kazakh outage

LONDON: Oil prices rebounded on Friday after US President Donald Trump renewed threats against Iran, raising concerns of military action that could disrupt crude supplies while there are outages in Kazakhstan.

Brent crude futures for March rose $1.68, or 2.6%, to $65.74 a barrel by 1408 GMT. US West Texas Intermediate crude was up $1.63, or 2.8%, at $60.99.

Both benchmarks were set for weekly gains of about 2.5%.

Prices had also climbed earlier in the week on US President Donald Trump’s moves on Greenland but dropped by about 2% on Thursday as he backed off tariff threats against Europe and ruled out military action.

Trump said on Thursday that Denmark, NATO and the US had reached a deal that would allow “total access” to Greenland.

But on Thursday he said that the US has an “armada” heading towards Iran but hoped he would not have to use it, as he renewed warnings to Tehran against killing protesters or restarting its nuclear programme.

Warships including an aircraft carrier and guided-missile destroyers will arrive in the Middle East in the coming days, a US official said. The United States conducted strikes on Iran last June.

At about 3.2 million barrels per day according to OPEC figures, Iran is OPEC’s fourth-biggest crude oil producer behind Saudi Arabia, Iraq and the United Arab Emirates. It is also a major exporter to China, the world’s second-largest oil consumer.

Meanwhile, Chevron said that oil output at Kazakhstan’s Tengiz oilfield, one of the world’s largest, has yet to resume after Chevron-led operator Tengiz chevr oil announced a shutdown on Monday following a fire.

The incident exacerbated problems for Kazakhstan’s oil industry, already challenged by bottlenecks at its main exporting gateway on the Black Sea, which has been damaged by Ukrainian drones.

JP Morgan said on Friday that Tengiz, which accounts for nearly half of Kazakhstan’s production, could remain offline for the rest of the month and that Kazakhstan’s crude output is likely to average only 1 million to 1.1 million barrels per day in January, compared with a usual level around 1.8 million bpd.