Oil prices edged lower during Friday’s Asian session and were on track for a second consecutive weekly decline, as easing geopolitical tensions involving Iran and growing concerns about global oversupply weighed on sentiment.
By 3:15 pm AEDT (4:15 am GMT), Brent crude futures were down 9 cents, or 0.1%, at US$67.43 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped 15 cents, or 0.2%, to US$62.71 per barrel.
In the previous session, both crude benchmarks had fallen sharply, with Brent dropping 2.7% and WTI losing 2.8%.
For the week, Brent is set to decline about 0.8%, while WTI is poised to fall roughly 1.1%. Earlier in the week, prices had found support on concerns that the United States could take military action against Iran over its nuclear programme.
However, comments on Thursday from U.S. President Donald Trump indicating that a deal with Iran could be reached within the next month helped to ease fears of supply disruption and drove prices lower.
Beyond geopolitics, the market has been pressured by a more subdued demand outlook. The International Energy Agency (IEA) said in its monthly report that global oil demand growth this year is expected to be weaker than previously forecast, while overall supply is projected to exceed demand.
ANZ analysts noted: "Global oil consumption is now seen rising by 850kb/d this year, down from 930kb/d in its January report. It also noted that oil stockpiles have swelled the most since 2020. Inventories increased by an extraordinary 477mbbls in 2025, with stocks in OECD countries surpassing their five-year average for the first time in four years.
"Oil trading firms suggest the rising level of sanctioned oil stranded at sea is driving up oil prices. According to ship-tracking firm Vortexa, there is around 290mbbls of Russian and Iranian crude currently on the water. This is more than 50% higher than a year ago.
"A ramp up of sanctions has restricted flows from these nations over the past few months, forcing buyers such as India to seek alternatives."
The build-up in inventories and the presence of sanctioned crude cargoes at sea underscore the complex supply dynamics facing the market. While sanctions have constrained official exports from Russia and Iran, elevated floating storage levels suggest barrels could re-enter the market under shifting policy conditions.
In a related development, the U.S. Treasury is expected to issue additional allowances easing sanctions on Venezuelan energy exports this week, according to a White House energy official.
U.S. Secretary of Energy Chris Wright told NBC that oil sales from Venezuela under U.S. control have totalled more than $1 billion since the capture of President Nicolas Maduro in January and could generate a further $5 billion in the coming months.
