Oil prices slipped on Friday, but remained near 3½ year highs on Friday as renewed U.S. sanctions on Iran tightened the outlook for Middle East supply at a time when global crude production is only just keeping pace with rising demand.
The United States is reintroducing sanctions against Iran, which pumps about 4 percent of the world's oil, after abandoning a deal reached in late 2015 that limited Tehran's nuclear ambitions in exchange for the removal of U.S. and European sanctions.
The global oil market is finely balanced, with top exporter Saudi Arabia and No.1 producer Russia having led efforts to curb oil supply to prop up prices.
"It's the same witches brew of bullish stuff: Iran, Venezuela, the lack of alacrity by Saudi Arabia to bring more oil onto the market," said John Kilduff, partner at Again Capital in New York.
"Prices may strengthen later in the day as traders shore up their positions, he said. "It's definitely not an environment to go home short over the weekend."