By: Economy Middle east

Oil prices declined on Friday, adding to losses from the prior session, after supply concerns eased as the risk of a U.S. military strike on Iran diminished.

As of 5:02 GMT, Brent crude slipped 15 cents, or 0.24 percent, to $$63.61 a barrel, while U.S. West Texas Intermediate fell 11 cents, or 0.19 percent, to $59.08 a barrel. Earlier this week, both benchmarks climbed to multi-month highs amid protests in Iran and remarks from U.S. President Donald Trump that raised the prospect of strikes on the country.

Despite Friday’s pullback, Brent was still on track to post a fourth consecutive weekly gain.

Subsiding geopolitical risks impact oil prices

Late on Thursday, Trump said Iran’s crackdown on protesters appeared to be subsiding, helping to ease fears that U.S. military action could disrupt oil supplies. Oil prices have since pared earlier gains but remain higher than a week ago, with prices pressured after Trump said he would refrain from launching strikes against Iran.

Amid the risk of political unrest in Iran, oil prices are expected to remain volatile as markets assess the potential for supply disruptions. However, analysts remain bearish, citing expectations of ample supply later this year despite earlier OPEC projections for a balanced market.

“Rising geopolitical risks from Iran had been propping up oil prices this week; however, President Trump’s comments yesterday eased tensions and capped the upside. He noted that violence in Iran’s protests was subsiding and indicated no plan for large-scale executions,” said Vijay Valecha, Chief Investment Officer, Century Financial.

U.S.-Venezuela tensions ease

On Wednesday, OPEC said global oil supply and demand would stay balanced in 2026, with demand growth in 2027 expected to match the pace seen this year. Meanwhile, Oil major Shell on Thursday released its 2026 Energy Security Scenarios, presenting a bullish outlook for energy demand and oil growth. The company projected that primary energy demand could be about 25 percent higher by 2050 compared with last year.

Adding to the bearish sentiment, Trump has taken steps to ease tensions with Venezuela, signalling support for the country’s continued participation in OPEC and raising the prospect of Venezuelan crude returning more fully to global markets.

Venezuela’s state-run oil company PDVSA has reportedly begun reversing production cuts imposed under a stringent U.S. oil embargo, as exports resume under U.S. supervision. Shipments had fallen to near zero following a December blockade, leaving Chevron as the sole exporter operating under a U.S. license.

Any increase in Venezuelan output would add to an already well-supplied market. Further weighing on oil prices, U.S. inventory data released this week showed rising crude and fuel stockpiles, reinforcing concerns about excess supply.

“On top of that, U.S. crude oil inventories reported by the EIA came in much higher than expected at 3.39 million compared to expectations of a 1.7 million drawdown, indicating short-term fundamental weakness,” Valecha added.