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(Bloomberg) -- Oil rose as simmering geopolitical conflicts and the prospect of sanctions on Russia and Iran countered projections for a supply glut next year.

West Texas Intermediate futures advanced 1.8% to top $71 a barrel, notching a weekly gain of about 6% and the highest closing price since Nov. 7, after a Russian air strike on Ukraine heightened geopolitical risks. Global benchmark Brent settled above $74.

Trump’s pick for national security adviser this week vowed a return to “maximum pressure” on Iran, while the Biden administration is considering new sanctions on Russia’s oil trade. The European Union has meanwhile given preliminary backing to a 15th package of sanctions against Russia.

The rising geopolitical risks to supply have options traders bracing for a price spike. Brent call options, which profit when prices gain, were at a premium to puts for the first time in three weeks at the close of trading on Thursday. Implied volatility also climbed.

On the demand side, top China officials vowed to raise the fiscal deficit and boost consumption next year, offering another tailwind to crude usage. In the longer term, Rapidan Energy Group is forecasting a boom period for oil prices after 2035, driven by demand in China and across the globe.

Also supporting prices, the United Arab Emirates cut oil shipment allocations for some customers in Asia, signaling stronger quota compliance from a key OPEC+ member state.

Still, prices have remained in a roughly $6 range since mid October, and the outlook for market balances in 2025 has grown murkier. The International Energy Agency on Thursday said global oil markets face a glut in 2025, while this week’s outlook from the US Energy Information Administration sees markets broadly in balance next year.

OPEC’s strategy is one of the key variables driving supply uncertainty, said Pavel Molchanov, an analyst with Raymond James.

“Whenever OPEC decides to ramp production back up, that’s when the risk of oversupply will become apparent,” Molchanov said. “This may be more of a 2026 story than a 2025 story, but it is bound to eventually happen.”

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