Oil prices extended gains on Friday as traders assessed heightened geopolitical risks, including U.S. President Donald Trump’s warnings against Iran and ongoing efforts to exert influence over Venezuela’s oil exports.
West Texas Intermediate (WTI) crude climbed above $58 a barrel, building on a 3.2% advance from Thursday—its largest daily gain since October. Brent crude traded near $62. The rally was fueled in part by Trump’s threat to respond “hard” if Iran’s government cracked down on protesters during a period of domestic unrest. Additionally, Citigroup noted that annual commodity index rebalancing is expected to channel fresh capital into oil, adding to upward momentum.
Trump also voiced support for a bipartisan Russian sanctions bill that could be voted on in Congress as early as next week. The measure aims to penalize buyers of Russian oil, including China and India.
Despite the recent rally, analysts warn that a substantial global surplus is likely to weigh on prices in the coming months. Goldman Sachs Group reported that its clients are the most bearish on oil in a decade.
“Crude remains caught in a complex dance between heightened geopolitical risk and rising inventory,” said Robert Rennie, head of commodity research at Westpac Banking Corp. He added that increased Venezuelan output and rising production elsewhere could keep prices trading in the $50s through the first quarter.
Investors are also monitoring U.S. moves in Venezuela following the ouster of former President Nicolás Maduro. Nearly 20 oil executives—including representatives from Exxon Mobil, Chevron, and veteran wildcatter Harold Hamm—are scheduled to meet with Trump and senior officials at the White House on Friday to discuss rebuilding the country's energy sector.
Chevron, currently the only U.S. major permitted to operate in Venezuela, is loading tankers with Venezuelan crude at the fastest pace in seven months, primarily supplying U.S. refiner Phillips 66. Trading firms Trafigura Group and Vitol Group are also in talks with American refiners about purchasing Venezuelan oil after securing preliminary licenses from the U.S. Treasury.
These developments could redirect Venezuelan crude flows toward U.S. processors, potentially at the expense of Chinese buyers, who have been the largest purchasers of heavily discounted Venezuelan oil in recent years. Some Chinese refiners are now exploring alternatives, including higher-cost supply from Canada.
