Oil Prices Mixed Amid Surplus Fears, Geopolitical Tensions

By Adedapo Adesanya

Oil prices were mixed on Friday as the market weighed signs of a growing global supply surplus and economic pressures in the nine-month war between the United States and Iran.

Brent futures were up 2 cents or 0.02 per cent to $95.84 a barrel, while US West Texas Intermediate (WTI) futures finished at $88.56 a barrel, down 18 cents, or 0.20 per cent.

For the week, Brent and WTI were both on track for a drop of over 2 per cent, as traders assessed rising global oil supplies, easing geopolitical risks and signs of softer demand in the US.

The International Energy Agency’s latest report pointed to an increase in the global oil supply surplus, signalling a shift in market concerns from potential shortages to excess supply.

“The oil market is showing tentative signs of rebalancing, with global oil supplies surpassing demand for the first time since the outbreak of the war in Iran,” the IEA said.

Oil exports from the Gulf have rebounded to 74 per cent of pre-war levels due to a surge from Saudi Arabia and Iraq, even as tankers continue to come under attack, the IEA said. Observed oil inventories increased in October for the first time since June, it added.

The agency bolstered estimates for global oil supplies in 2026 by a substantial 920,000 barrels a day. While world markets as a whole face a deficit this year because of the war’s disruption to output, the annual shortfall is 60 per cent lower than projected in last month’s report.

Rebounding supplies from the Middle East, coupled with signs that President Donald Trump may refrain from renewed military action in Iran, have helped lower oil prices.

President Trump also said a deal with Iran was not necessary to end the war, while tensions persisted over the US’ position and Iran’s refusal to allow nuclear inspectors into the country.

Risks to global oil supplies remain, particularly around the Strait of Hormuz, a major shipping route for crude exports from key Middle Eastern producers.

Iran’s military said on Thursday that four oil tankers were hit by explosions in the waterway after ignoring warnings.

The Houthis also claimed responsibility for attacks on a pumping station along Saudi Arabia’s East-West oil pipeline, an oil facility in Yanbu and an Aramco building in Riyadh.