Oil prices climbed modestly on Friday but remained on course for their sharpest weekly decline in over a year, as fears of supply disruption stemming from the recent Iran-Israel conflict faded and market focus returned to fundamentals.
Brent crude futures rose by 50 cents, or 0.7%, to $68.23 a barrel by mid-morning in London, while U.S. West Texas Intermediate (WTI) crude gained 49 cents, or 0.8%, to trade at $65.73.
Despite the gains, both benchmarks are set to record weekly losses of around 12% — the steepest since March 2023 — after prices tumbled from recent highs. Brent had briefly surged above $80 per barrel during the early days of the 12-day conflict, which erupted after Israel launched strikes on Iranian nuclear facilities on June 13. However, the announcement of a ceasefire by U.S. President Donald Trump led to a sharp retreat in prices.
“The market has almost entirely shrugged off the geopolitical risk premiums from almost a week ago as we return to a fundamentals-driven market,” said Janiv Shah, an analyst at Rystad Energy.
Attention is now turning to supply and demand dynamics, particularly ahead of the upcoming OPEC+ meeting on July 6. The group is expected to decide on production levels for August, and analysts suggest there may be a case for another month of increased supply, depending on how summer demand indicators evolve.
“Market fundamentals, particularly demand forecasts and inventory levels, are once again steering sentiment,” said Tamas Varga, analyst at PVM Oil Associates. He noted that recent inventory data from the U.S. Energy Information Administration (EIA) showed draws in crude and refined products, indicating strengthening demand and increased refining activity.
Further supporting prices were declining stockpiles of middle distillates at major global hubs. Gasoil inventories at the Amsterdam-Rotterdam-Antwerp (ARA) hub have fallen to their lowest level in over a year, while Singapore’s middle distillate supplies also dropped amid rising net exports.
Meanwhile, China’s imports of Iranian crude surged to record levels in June, according to data from ship-tracking firm Vortexa. From June 1–20, China imported over 1.8 million barrels per day (bpd) of Iranian oil, reflecting a pre-conflict boost in shipments and stronger demand from independent refiners. China remains the world’s top oil importer and the largest buyer of Iranian crude.
With geopolitical tensions easing and market fundamentals back in focus, all eyes are now on the upcoming OPEC+ meeting and global demand patterns as summer unfolds.
