WTI rises to near $73.50 as Middle-East tensions weigh on potential supply disruption

• WTI price receives support from rising geopolitical tensions in the Middle East, raising concerns about potential supply disruptions.
• US President Joe Biden stated that Israel could strike Iran's Oil infrastructure.
• OPEC+ could potentially offset a complete loss of Oil supply if Iran's facilities are targeted.

West Texas Intermediate (WTI) Oil price continues to rise for the fourth consecutive day, holding firm with strong weekly gains, trading around $73.50 per barrel during Friday's Asian session. Crude Oil prices are supported by escalating geopolitical tensions in the Middle East, raising concerns about potential disruptions in crude supply from the region, which accounts for roughly one-third of the global Oil supply.

US President Joe Biden stated that the United States (US) is in discussions with Israel about potential strikes on Iran's Oil infrastructure. Israeli Prime Minister Benjamin Netanyahu warned that Iran "will pay a heavy price" for Tuesday's attack, which involved the firing of at least 180 ballistic missiles at Israel, according to the BBC.

However, OPEC+, which consists of The Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia and Kazakhstan, has sufficient spare Oil capacity to offset a complete loss of Iranian supply if Israel were to target Iran's facilities. However, the group would face significant challenges if Iran retaliates by attacking the Oil installations of its Gulf neighbors.

OPEC+ has been reducing production in recent years to support Oil prices in the face of weak global demand, leaving the group with millions of barrels in spare capacity. Currently, OPEC+ production cuts amount to 5.86 million barrels per day (bpd). Analysts estimate that Saudi Arabia can increase output by 3.0 million bpd, while the United Arab Emirates (UAE) can boost production by 1.4 million bpd.

Libya's eastern-based government and the Tripoli-based National Oil Corporation announced on Thursday the reopening of all oilfields and export terminals, following the resolution of a leadership dispute at the central bank. This decision ends a crisis that had significantly reduced the country's Oil production, according to Reuters.