Oil Prices Surge as Iran Unrest and Ukraine Escalation Spark Supply Fears

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Oil prices surged more than 2% on Friday as intensifying civil unrest in Iran and a major escalation in the Russia-Ukraine conflict sparked significant supply concerns. Brent crude futures settled up 2.18% at $63.34 per barrel, while U.S. West Texas Intermediate (WTI) rose 2.35% to $59.12, marking a weekly gain of roughly 4% for the global benchmark.

Market analysts noted that the 'gathering momentum' of protests in Iran, which included a nationwide internet blackout, has put traders on edge regarding potential disruptions to the country’s output. These fears are compounded by recent data showing that OPEC production has already begun to slip, with Iran and Venezuela posting the largest output declines.

Geopolitical tensions were further heightened by Russia’s deployment of its hypersonic Oreshnik missile against Ukrainian energy infrastructure, an escalation that analysts say adds a layer of instability to the global energy market. Meanwhile, the United States is moving to overhaul the Venezuelan oil sector following the capture of Nicolás Maduro. The Trump administration is currently negotiating with oil majors like Chevron and global trading houses to market 50 million barrels of accumulated PDVSA inventory, signaling a shift toward indefinite U.S. control over Venezuelan oil revenue.

Despite these supply-side shocks, some analysts caution that the price rally may be limited by rising global inventories and a general oversupply, unless the situation in Iran escalates into a full-scale production halt.