Oil Prices Rise Amid Iran's Refusal to Export Enriched Uranium

Oil prices rose on Friday following a three-day decline, as investors reacted to mixed signals regarding negotiations over Iran's nuclear program. While U.S. officials had indicated that a peace deal was near, reports that Iran's Supreme Leader Ayatollah Mojtaba Khamenei has ordered that enriched uranium remain within the country have heightened concerns about extended geopolitical tensions and potential disruptions to oil supplies.

In early Asian trading, July futures for Brent crude increased by 1.9% to $104.52 per barrel, while U.S. West Texas Intermediate futures for June rose 1.5% to $97.81 per barrel.

The International Energy Agency (IEA) has warned that as travel demand grows during the summer season, oil markets could enter a "red zone" soon as global stocks deplete. IEA Executive Director Fatih Birol emphasized that a full and unconditional reopening of the Strait of Hormuz is crucial to addressing the energy shock caused by the Iran conflict.

The ongoing conflict, which began in late February, has significantly disrupted traffic through the Strait of Hormuz, a vital passage through which about a fifth of the global oil and liquefied natural gas previously flowed. The IEA has described the situation as the largest supply disruption in the history of the global oil market, with crude and oil product flows through the Strait falling from around 20 million barrels per day before the conflict to a near standstill.

Energy executives have cautioned that full normalization of Middle East oil supply may not occur until 2027 due to the scale of disruptions caused by the conflict. The IEA has also noted that developing Asian and African countries are likely to experience the most severe impacts of this crisis.