By: Economy Middle east

Oil prices edged higher on Friday but were heading for their first weekly decline in seven weeks as supply worries eased and markets turned their attention to U.S.-Iran nuclear talks scheduled in Oman later in the day.

As of 5:35 GMT, Brent crude climbed 38 cents, or 0.56 percent, to $67.93 a barrel, while U.S. West Texas Intermediate also rose 41 cents, or 0.65 percent, to $63.70 a barrel. Both benchmarks were down more than 3 percent from near six-month highs hit in late January, after U.S. President Donald Trump threatened strikes on Iran, ahead of the renewed talks between the two sides.

Geopolitical risks persist

Oil prices rose after Tehran and Washington remained divided over the scope of the talks, with Iran seeking to limit discussions to nuclear matters, while the U.S. wants to broaden the agenda to include Iran’s ballistic missile program, its backing of armed groups across the region and human rights issues.

Despite the upcoming talks, concerns persist that Trump may still follow through on threats to strike Iran, OPEC’s fourth-largest producer, potentially triggering a broader conflict in the oil-rich region. Beyond the risk of disrupted Iranian output, there are also worries that exports from other Gulf producers could be impacted.

Any escalation in U.S.-Iran tensions could threaten oil supplies, as roughly a fifth of global oil consumption moves through the Strait of Hormuz between Oman and Iran.

Saudi Arabia, the UAE, Kuwait and Iraq ship most of their crude through the strait, along with fellow OPEC producer Iran. Should U.S.-Iran talks reduce the risk of regional conflict, oil prices could come under additional pressure.

Stronger dollar impacts oil prices

Brent and WTI futures fell between 2.5 percent and 4 percent this week, as traders took profits after several weeks of gains. Crude prices had initially been supported by expectations of tighter supply, driven by extreme weather disruptions in the U.S., production outages in Kazakhstan and concerns over potential conflict in the Middle East.

However, this momentum eased amid profit-taking, while a broader slide in commodity markets, coupled with a stronger U.S. dollar, added further pressure on oil prices. The dollar was on track for its strongest week since October, as markets interpreted Kevin Warsh, Trump’s nominee for the next Federal Reserve chair, as likely to take a less dovish stance.