Oil prices extend gains for second day: Reasons named
Photo: Oil prices rise amid developments in Venezuela and Iran (Getty Images)
Oil prices rise for a second day in a row amid concerns over potential supply disruptions following the detention of Venezuelan leader Nicolás Maduro and Iran protests, according to Reuters.
Price dynamics
As of the morning of January 9, Brent oil futures were up 1.3% at $62.82 per barrel. US West Texas Intermediate (WTI) oil gained 1.3% to $58.52 per barrel. Both benchmarks are on track to end the week higher.
Venezuela and Iran factor
Geopolitical risks have become the main drivers of the price increase:
- Venezuela: After the detention of Nicolás Maduro, the US said it intends to take control of the country's oil sector. Companies such as Chevron, Vitol, and Trafigura are already competing for the right to export Venezuelan oil through US government contracts.
- Iran: Mass anti-government protests and internet shutdowns have raised market concerns about a potential output reduction by one of OPEC's largest producers.
- Russia: Additional pressure is coming from the risk of strikes on Russian oil infrastructure amid the war in Ukraine.
Analysts' outlook
Experts note that the price increase is driven by expectations of higher prices for Venezuelan oil, which had previously been sold at steep discounts. At the same time, the market is being weighed down by a forecast from the International Energy Agency (IEA) warning of a potential supply surplus in 2026, which helps curb a sharper rally.
Major US oil firms are demanding legal and financial guarantees from the Trump administration to resume investments in Venezuela.
Company executives are concerned about political risks and insist on clear safeguards before committing funds to the country's damaged infrastructure.
The United States plans to sell Venezuelan oil on an open-ended basis. US Secretary of Energy Chris Wright said that proceeds from the sales would be accumulated in special accounts under US government control and directed toward the needs of the Venezuelan people.
