Oil resumes rally as Iran wants to keep uranium within the country

Oil prices continued their rise on Friday after falling for three consecutive sessions as investors weighed mixed messages about Iran peace deal negotiations.

While statements from the USA indicate that a peace agreement is close, the Iranian leadership’s attitude towards keeping enriched uranium in their own country has increased concerns of a long-term conflict, which will lead to a longer interruption of oil supply.

July futures contracts for international benchmark Brent crude rose 1.9% to $104.52 per barrel in early Asian trading, while U.S. West Texas Intermediate futures rose 1.5% to $97.81 per barrel for June.

Iran’s Supreme Leader Ayatollah Mojtaba Khamenei issued instructions According to Reuters, based on Iranian sources, it was stated that uranium close to weapons grade in the country should not be sent abroad.

This came after US President Donald Trump said Washington was in the “final stages” of negotiations with Iran, according to the pool report.

Concerns about oil supply continue, with the International Energy Agency warning that oil markets may enter the “red zone” when global stocks are depleted while travel demand increases in the summer season.

Stating that the most important solution to the energy shock caused by the Iran war will be the complete and unconditional reopening of the Strait of Hormuz, IEA Executive Director Fatih Birol said that “developing Asian and African countries will feel the greatest pain of this crisis.”

“Energy executives have warned that full normalization of Middle East oil supplies may not occur until 2027 due to the extent of disruptions caused by the conflict,” according to a recent note from MUFG.

The Iran war, which started in late February, is disrupting traffic through the critical Strait of Hormuz, through which about a fifth of global oil and liquefied natural gas passed before the war.

—CNBC’s Sam Meredith contributed to the report.