Oil prices climbed more than 2% on Friday, with Brent settling at $70.36 per barrel (up $1.72, or 2.5%) and WTI at $68.45 (up $1.88, or 2.8%), as the International Energy Agency (IEA) said the market may be tighter than it appears, even as U.S. tariffs and potential new sanctions on Russia drew investor attention. For the week, Brent gained 3% and WTI rose 2.2%.
The IEA noted that peak summer refinery runs and rising power generation demand are tightening supply in the near term. Brent’s front-month contract traded at a premium over the next month, suggesting expectations of short-term tightness. Saudi Arabia is also expected to ship over 51 million barrels to China in August — its largest such delivery in more than two years — reinforcing robust demand signals.
Meanwhile, U.S. oil and gas drillers cut rigs for the 11th straight week, the longest such streak since mid-2020, reflecting cautious producer behavior even as prices firm. Russia, which exceeded its OPEC+ quota, pledged to make up for the overage in August and September, potentially limiting additional supply in the near term.
However, supply concerns remain in the background. The IEA raised its 2024 supply growth forecast while lowering its demand outlook, hinting at a possible surplus later in the year. OPEC+ is expected to continue unwinding voluntary cuts, and Commerzbank analysts warned that a significant oversupply could emerge if OPEC+ ramps up output too aggressively.
Geopolitical uncertainty also supported prices. Trump teased a “major statement” on Russia for Monday, while the EU is preparing a floating cap on Russian oil prices. Despite Thursday’s selloff on tariff fears, the combination of tight short-term supply and geopolitical risk helped oil rebound to two-week highs.