Oil prices jump amid escalating protests in Iran
Photo: potential supply disruptions from Iran impact the oil market (Getty Images)
Global oil prices rose by more than 2% amid escalating tensions in Iran and concerns over potential export disruptions, outweighing expectations of increased supplies from Venezuela, according to Reuters.
Brent crude futures rose by $1.60, or 2.5%, on Tuesday to $65.47 per barrel. US West Texas Intermediate crude gained $1.65, or about 2.8%, to $61.15 per barrel.
John Evans, analyst at PVM Oil Associates, said the market is pricing in a “geopolitical premium,” factoring in the potential removal of Iranian oil from the market, supply problems in Venezuela, talks related to Russia’s war against Ukraine, and broader geopolitical signals from the United States.
Iran, one of the key producers in OPEC, is facing its largest anti-government protests in years. According to an Iranian official, around 2,000 people have been detained, with thousands more arrested. The situation prompted a strong reaction from US President Donald Trump, who warned of possible military action.
Trump also said that countries doing business with Iran could face a 25% tariff on trade with the United States. China remains the largest buyer of Iranian crude oil. According to estimates by Mizuho Securities, a complete loss of Iranian barrels could cut global supply by about 3.3 million barrels per day.
Additional support for prices came from reports of drone attacks on four Greek oil tankers in the Black Sea that were heading to a terminal of the Caspian Pipeline Consortium near the Russian coast.
Analysts note that concerns about oversupply have temporarily faded. Barclays estimates that unrest in Iran has added $3–4 per barrel to the geopolitical premium in oil prices.
Markets are also watching developments in Venezuela following the overthrow of President Nicolás Maduro. Trump said Caracas is ready to transfer up to 50 million barrels of oil currently under Western sanctions to the United States, although additional supplies could partially limit further price gains.
On January 13, Brent futures had already jumped by $1.06, or 1.7%, to $64.93 per barrel, marking their highest level since mid-November.
