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Oil prices rose on Friday as Brent crude climbed above $104 per barrel, but the market remains on track for weekly losses amid uncertainty over US-Iran peace talks. OPEC+ sources indicated seven major producers may approve a modest output increase in July, despite war-related disruptions. Brent and WTI futures gained 1.6% and 1.1% respectively, but weekly declines of 4.6% and 7.6% persist due to shifting geopolitical expectations. BMI raised its 2026 Brent price forecast to $90/barrel, citing supply shortages and infrastructure repair delays in the Middle East.
The market's volatility hinges on the likelihood of a US-Iran peace agreement, which could significantly impact oil supply dynamics. Traders are also monitoring OPEC+ output decisions and Baker Hughes data on US drilling rigs for further signals. A breakthrough in negotiations might ease tensions, reducing supply risks, while a delay could prolong price instability. The Gulf's energy sector, heavily reliant on oil exports, faces direct implications from these developments.
For MENA investors, the interplay between geopolitical risks and OPEC+ policy adjustments will shape near-term oil price trajectories. Key watchpoints include the June 7 OPEC+ meeting outcome, progress in US-Iran talks, and the pace of Middle East infrastructure recovery. These factors will determine whether the current price rebound sustains or if weekly losses deepen.
