Brent crude futures rose by 8 cents (0.1%) to $74.11 per barrel as of 0949 GMT, extending an eight-day winning streak — its longest since May 2022.
U.S. West Texas Intermediate (WTI) crude also climbed 5 cents (0.1%) to $69.97 per barrel.
Both benchmarks have gained roughly 2.5% this week and about 7% since hitting multi-month lows in early March.
Reuters reported that the price rally on Friday marked a third consecutive weekly gain, and is attributed to escalating U.S. sanctions on Venezuela and Iran by the United States.
“The potential loss of Venezuelan crude exports to the market due to secondary tariffs and the possibility of similar restrictions on Iranian barrels has created an apparent tightness in crude supply,” June Goh, senior oil analyst at Sparta Commodities, told Reuters.
U.S. sanctions cause supply uncertainty
Experts say the recent oil price rally is largely driven by shifting global sanctions.
- U.S. President Donald Trump imposed a 25% tariff on potential buyers of Venezuelan crude, further complicating trade for the South American country.
- This move followed fresh U.S. sanctions targeting China’s imports from Iran, creating more uncertainty in global oil markets.
- Reuters reported that as a result of the sanctions, trade of Venezuelan crude to its largest buyer, China, has stalled.
Meanwhile, India’s Reliance Industries, which operates the world’s largest refining complex, is set to halt Venezuelan oil imports, according to sources familiar with the matter.
U.S. demand supports prices, but market uncertainties remain
In addition to supply constraints, signs of stronger demand in the U.S. provided further support to oil prices.
- The Energy Information Administration (EIA) reported that U.S. crude inventories dropped by 3.3 million barrels last week, far exceeding analysts’ expectations of a 956,000-barrel decline.
- Oil prices continue to ride the wave of geopolitical tensions, but whether the rally holds in the face of trade conflicts and economic uncertainty remains uncertain.
“While the market is suffering under extreme uncertainties, we are holding to our forecast for Brent crude to average $76 per barrel in 2025, down from $80 per barrel in 2024,” BMI analysts wrote in a market commentary.
Implication for Nigeria
A high crude oil price means improved revenue for the country. However, experts say it could have an inflationary impact on citizens.
- Recent changes in pump prices have been attributed to changes in crude oil prices in the global market.
- On the implication for the nation’s revenue, the current price of Brent oil is close to Nigeria’s price benchmark for the 2025 budget – $75 per barrel.
