Oil Prices Approach Two-Week Highs Amid Geopolitical Risks

Brent crude futures edged up by 13 cents (0.2%) to $75.30 per barrel as of 0115 GMT, while U.S. West Texas Intermediate crude gained 14 cents (0.2%) to $71.38. Both benchmarks recorded their largest weekly gains since late September, reaching their highest settlements since November 7.

The recent surge followed heightened hostilities, including Russia’s use of a hypersonic missile in response to Ukrainian strikes facilitated by Western weapons. Analysts at ANZ highlighted that these developments signal a more dangerous phase in the conflict, intensifying concerns about potential supply disruptions.

In parallel, Iran’s reaction to a recent resolution by the UN nuclear watchdog added to market anxieties. Tehran announced measures such as activating advanced uranium enrichment centrifuges, escalating tensions around its nuclear program. Analysts, including Commonwealth Bank of Australia’s Vivek Dhar, noted that renewed sanctions on Iranian oil exports—potentially enforced by incoming leadership in the U.S.—could remove up to 1 million barrels per day from global markets, about 1% of total supply.

Further discussions between Iran and European nations about its nuclear program are set for November 29, offering a potential avenue for de-escalation.

On the demand side, rising crude consumption in China and India added another layer of bullish sentiment. China’s November crude imports rebounded due to stockpiling at lower prices, while India increased crude throughput by 3% year-over-year to 5.04 million barrels per day in October, buoyed by strong fuel export demand.

​These developments highlight the intricate balance of geopolitical risks and robust demand in shaping the oil market’s trajectory.