Oil prices exhibited minimal fluctuations on Friday following an increase in the prior session. This stability comes as apprehensions regarding drone attacks on northern Iraqi oil fields potentially disrupting supply contend with concerns about possible declines in demand, fueled by uncertainty surrounding U.S. tariff policy. Brent crude futures declined by 4 cents, representing a decrease of 0.06%, settling at $69.48 per barrel. Meanwhile, U.S. West Texas Intermediate crude futures fell by 3 cents, or 0.04%, to $67.51 per barrel.

Four consecutive days of drone strikes targeting oil fields in Iraqi Kurdistan, which resulted in the cessation of half the region’s production, have bolstered prices, leading to an increase of $1 in both contracts on Thursday. Furthermore, seasonal travel demand has supported the market.  During the initial fortnight of July, worldwide oil consumption has reached an average of 105.2 million barrels per day (bpd), reflecting an increase of 600,000 bpd compared to the same period last year and aligning closely with projections, according to a research note from JPMorgan analysts.

Nonetheless, the ambiguity surrounding the ultimate U.S. tariff policy, which seems unlikely to be resolved before August 1, is exerting pressure on the market. This is compounded by intentions from leading oil producers to lift their output cuts, which will increase supply as the seasonal demand in the Northern Hemisphere summer comes to a close.  This week, both Brent and WTI have experienced a decline exceeding 1%. “Near-term oil fundamentals remain supportive, with the market set to remain fairly tight through this quarter, before becoming better supplied from the last three months of the year,” ING analysts noted.

Oil production in the semi-autonomous Kurdistan region has been reduced by approximately 140,000 to 150,000 barrels per day, according to two energy officials, representing more than half of the region’s typical output of around 280,000 bpd. Officials identified Iran-backed militias as the probable origin of the attacks this week on the oilfields in Iraqi Kurdistan, despite the absence of any group claiming responsibility. In the wake of the recent attack, the federal government of Iraq announced on Thursday that Iraqi Kurdistan will recommence oil exports via a pipeline to Turkey, following a two-year suspension.