Oil surged over 2% to multi-month highs as skepticism over US-Iran talks reignites risk premium

Oil prices rallied sharply on Friday, surging over 2% to reach their highest levels since the summer, as deep skepticism over the extended US-Iran nuclear negotiations reignited fears of a severe Middle East supply disruption.

Brent crude futures settled at $72.48 a barrel, up $1.73, or 2.45%. US WTI finished at $67.02 a barrel, climbing $1.81, or 2.78%.

The powerful late-week surge placed both benchmarks on track for significant weekly gains, effectively reversing the sentiment-driven selloff seen earlier in the week. The market aggressively priced back in a geopolitical risk premium—estimated by analysts at $8 to $10 a barrel—after indirect talks between Washington and Tehran in Geneva failed to yield a definitive breakthrough.

Before the outbreak of hostilities between the US, Israel, and Iran on Saturday, Omani mediators confirmed that technical-level discussions in Vienna were set to continue into next week. At the time, traders were highly doubtful that Iran would accept the Trump administration’s stringent demands, reportedly including zero uranium enrichment. With the White House’s 10-to-15-day ultimatum issued on February 19 still running, market participants were increasingly positioning for the possibility that military strikes could become inevitable.

Even before the conflict erupted, concerns over a potential blockade or disruption in the Strait of Hormuz, a key route for roughly 20% of global oil supply, were driving a sharp rally. Oil were largely anchored to these headline risks, with underlying supply-and-demand fundamentals taking a backseat.

Written by: Aiman Haikal