BY COMFORT OGBONNA
Oil prices edged lower on Friday and were on track for a second consecutive weekly decline as fears of a potential U.S.–Iran conflict eased, reducing concerns about immediate supply disruptions from the Middle East.
Brent crude futures slipped 6 cents, or 0.1%, to $67.46 per barrel in early trading after dropping 2.7% in the previous session. U.S. West Texas Intermediate (WTI) crude fell 12 cents, or 0.2%, to $62.72 per barrel, following a 2.8% decline a day earlier. For the week, Brent was set to fall about 0.8%, while WTI was on track to lose roughly 1.1%.
Earlier in the week, prices had climbed on worries that escalating tensions between the United States and Iran over Tehran’s nuclear program could result in military action, threatening supplies from a key oil-producing nation. However, comments from U.S. President Donald Trump indicating that a potential deal with Iran could be reached within the next month helped calm markets and pull prices lower.
Analysts noted that signs Washington is allowing more time for negotiations have reduced the near-term geopolitical risk premium embedded in crude prices. While uncertainty remains, traders appear less concerned about an immediate disruption to Iranian oil exports.
In addition to easing geopolitical tensions, the latest monthly report from the International Energy Agency projected weaker-than-expected global oil demand growth this year. The agency also indicated that overall supply is likely to exceed demand, reinforcing expectations of a well-supplied market in the months ahead.
Despite bearish headlines, some market observers pointed out that oil prices did not extend losses significantly, suggesting that downside momentum may be slowing in the short term. This resilience indicates that traders are balancing softer demand forecasts against ongoing geopolitical risks and potential supply adjustments by major producers.
Thursday’s decline was further amplified by data showing a substantial build in U.S. crude inventories, signaling ample domestic supply. At the same time, expectations are growing that Venezuelan oil production could increase in the coming months. Analysts estimate output could rise from around 880,000 barrels per day to approximately 1.2 million barrels per day if easing sanctions allow more exports to reach global markets.
The U.S. Treasury is expected to issue additional allowances easing sanctions on Venezuelan energy exports, potentially paving the way for higher shipments. U.S. Secretary of Energy Chris Wright said oil sales from Venezuela under U.S. oversight have already generated over $1 billion since January and could bring in another $5 billion in the months ahead.
Taken together, easing geopolitical tensions, rising stockpiles, expectations of stronger Venezuelan output, and a softer demand outlook have weighed on crude prices this week. However, with negotiations ongoing and supply dynamics evolving, the oil market remains sensitive to fresh developments that could quickly shift sentiment.
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