Oil prices could soon rally above $90 a barrel amid growing concerns over the prospect of steep declines in Iranian crude, according to industry analysts.
Brent crude was on track to post a fourth week of declines in five on Friday, with the global oil benchmark poised to slip more than 1 percent amid continued volatility in the energy market.
Investors are seen weighing bullish factors that include potential supply disruptions to Iranian crude exports against more bearish indicators, such as a ramp-up in production by OPEC and its allied partners.
"Venezuela's ticking time bomb together with the return of Iran's oil industry to the sanctions era has all the makings for a major supply shock," Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note published Friday.
"The rising tide of global supply outages will offer a lifeline to those of a bullish disposition. (And) the potential for another price spike cannot therefore be discounted," he added.
Alongside Russia, OPEC kingpin Saudi Arabia and other members of the Middle-East dominated oil cartel agreed in late June to begin increasing production by up to 1 million barrels per day starting in August.
The decision has helped to put a lid on a price rally, with crude futures falling more than 7 percent since climbing above $80 a barrel in May.
The price jump earlier this summer had come about in large part because of President Donald Trump's decision to pull the U.S. out of an international agreement to curb Iran's nuclear program.
The Trump administration's move is widely expected to severely hinder the world's fifth-largest oil producer, with the re-imposition of economic sanctions set to take place over the coming weeks.
"The ongoing escalation of trade wars presents a major downside risk to oil demand. Yet, we remain much more concerned about the ongoing U.S. sanctions on Iran," analysts at Bank of America Merrill Lynch said in a research note published last week.
"Under different scenarios, Iranian supplies could drop as much as 0.8 million barrels per day. In turn, for every 1 million barrels per day imbalance, we see a price impact on Brent of around $17," they added.
On Friday, Brent crude traded around 0.1 percent lower at $73.44.