Oil Rises After U.S. Fleet Moves Toward Iran: Does Escalation Threaten Supplies?
Oil prices saw a significant increase today, Friday, after U.S. President Donald Trump renewed his threats against Iran, raising concerns about the possibility of military escalation that could disrupt oil supplies in the region.
Specifically, March Brent crude futures rose by 0.55%, reaching $64.41 per barrel, while West Texas Intermediate crude increased by 0.56%, recording $59.69 per barrel by 02:43 GMT.
This increase follows a nearly 2% drop in prices yesterday, Thursday, after Trump's statements downplayed the likelihood of direct military action, but he confirmed that the U.S. naval fleet is on its way to the Middle East.
Trump mentioned that he hopes he will not have to use this military force, while reiterating his warnings to Tehran regarding its treatment of protesters, as well as the resumption of its nuclear program.
An American official clarified that the aircraft carrier and guided missile destroyers will arrive in the region in the coming days, increasing the likelihood of rising military tensions.
Iran is the fourth-largest oil producer in OPEC and has a significant influence on the global energy market, especially as it is a major supplier to China, the world's second-largest oil consumer.
The oil markets have experienced some fluctuations in recent days, with prices rising earlier in the week following Trump's threats to invade Greenland, raising questions about the stability of international alliances.
However, prices fell after the U.S. president backed away from military threats.
On another note, oil prices declined the previous day after the U.S. Energy Information Administration released data showing an increase in U.S. crude oil inventories by about 3.6 million barrels during the week ending January 16, exceeding previous expectations of a 1.1 million barrel increase.
It is worth noting that the United States is the largest oil consumer in the world, and rising inventories reflect a slowdown in fuel demand amid growing concerns about the impacts of geopolitical tensions on the markets.
* Weekly Gains for Oil
Brent and West Texas Intermediate are on track to record weekly gains of about 0.6%, reflecting the markets' response to rising prices in recent days amid volatile geopolitical conditions.
The markets are closely monitoring developments in the region, with significant implications for the stability of oil supplies if tensions escalate.
