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West Texas Intermediate (WTI) Oil price depreciates after three days of gains, trading around $64.00 per barrel during the Asian hours on Friday. However, WTI stayed on track for roughly 12% monthly gains, underpinned by a rising geopolitical risk premium.

Geopolitical risks stayed elevated after Iran warned it would “defend itself and respond like never before” in reaction to fresh threats from US President Donald Trump, who urged Tehran to enter nuclear talks. Iran cautioned that it would retaliate if provoked.

Tensions intensified further after the European Union designated Iran’s Islamic Revolutionary Guard Corps as a terrorist organization. Adding to the strain, reports suggested the US was increasing its military presence near Iran, while Tehran announced live-fire military drills in the strategically critical Strait of Hormuz, amplifying concerns over regional security.

Markets are focused on how these tensions could affect shipping through the Strait of Hormuz, a vital chokepoint between Iran and the Arabian Peninsula through which crude Oil and LNG tankers transit daily. Westpac Strategy Group said regime change in Iran would likely be chaotic, unlike the US-led removal of Maduro or surgical strikes on Fordow, according to Dow Jones Newswires.

The Trump administration loosened some sanctions on Venezuela’s Oil industry on Thursday to attract US investment after President Nicolas Maduro was removed earlier this month. The US Treasury approved transactions involving Venezuela’s government and state-run PDVSA, enabling US companies to produce, sell, transport, and refine Venezuelan-origin Oil.

Earlier this month, Oil prices also found support from production outages in Kazakhstan, US freeze-offs, and tighter US curbs on Russian Oil purchases, helping lift prices this year despite expectations of oversupply.

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