FX.co ★ Oil Heads for Best Month in Over 2 Years

WTI crude oil futures dipped below $65 per barrel on Friday, yet still marked their strongest month since July 2023, driven by an increased geopolitical risk premium. Lingering concerns stem from renewed tensions between the United States and Iran. US President Donald Trump has called for Iran to participate in nuclear discussions, while Tehran has issued warnings of potential retaliation. Market observers are particularly attentive to the implications these tensions may have on shipping via the Strait of Hormuz—a crucial passage for global energy transport situated between Iran and the Arabian Peninsula, through which oil tankers and LNG vessels routinely navigate. Earlier in the month, oil prices were also bolstered by geopolitical issues in Venezuela, production disruptions in Kazakhstan, freeze-offs in US production, and the tightening of US restrictions on the procurement of Russian oil. These factors have collectively contributed to the upward pressure on prices this year, despite anticipated oversupply.