Oil prices declined for a second consecutive day on Wednesday as expectations grew that peace talks between the U.S. and Iran could resume, potentially restoring supply from the Middle East that has been disrupted by the closure of the Strait of Hormuz.
Brent crude slipped 0.55% to $94.27 per barrel after a sharp 4.6% drop in the previous session, while U.S. West Texas Intermediate fell 1.1% to $90.24 following an even steeper 7.9% decline earlier.
Investor sentiment improved after President Donald Trump suggested that negotiations to end the conflict involving the U.S., Israel, and Iran could restart in Pakistan within days. The earlier breakdown in talks had led Washington to impose a blockade on Iranian ports, but renewed diplomatic hopes are raising expectations that oil and fuel flows could eventually resume.
The conflict has effectively shut down the Strait of Hormuz, a crucial route for transporting crude and refined products from the Gulf to global markets, particularly in Asia and Europe. Although a ceasefire has been in place for two weeks, shipping activity remains severely limited, with vessel traffic far below pre-war levels.
On Tuesday, a U.S. warship reportedly prevented two oil tankers from departing Iran, underscoring ongoing disruptions. Analysts at the Schork Group noted that while diplomatic developments hint at easing restrictions, actual conditions on the ground remain unstable, leaving markets focused on the risk of supply disruptions rather than a full recovery.
Further tightening supply concerns, U.S. officials indicated that sanctions waivers on Iranian oil shipments will not be renewed, and a similar waiver for Russian oil has already expired.
Later in the day, attention will turn to U.S. inventory data from the Energy Information Administration. Expectations are for a modest increase in crude stockpiles, alongside declines in gasoline and distillate inventories. Meanwhile, preliminary data from the American Petroleum Institute suggested that crude inventories rose for a third straight week.
Oil prices slipped in early Asian trading on Tuesday as renewed hopes for U.S.–Iran negotiations eased worries about supply disruptions linked to the U.S. blockade of the Strait of Hormuz.
Brent crude dropped $1.86 (1.87%) to $97.50, while WTI fell $2.25 (2.27%) to $96.83. This pullback followed strong gains in the previous session, when prices surged after the U.S. launched a blockade of Iran’s ports.
The U.S. military expanded the blockade beyond the strait into the Gulf of Oman and the Arabian Sea, with early signs of disruption already visible as ships began turning back. In response, Iran warned it could target ports in neighboring Gulf countries after weekend talks in Islamabad failed to produce a resolution.
Despite the breakdown, optimism lingered as both sides signaled a willingness to keep negotiations alive. Analysts noted that even the hint of a potential deal helped cool the rally in oil prices.
Market estimates suggest roughly 10 million barrels per day of supply have already been affected, with the risk of further losses if the blockade continues. Still, analysts argue that tight supply conditions alone may be enough to keep prices elevated.
Meanwhile, NATO allies such as Britain and France declined to support the blockade, instead pushing for the reopening of the key shipping route. U.S. officials indicated prices could peak in the coming weeks if flows resume.
Global institutions, including the IMF, World Bank, and IEA, urged countries to avoid hoarding or restricting exports, warning of a major shock to the energy market. OPEC also trimmed its global demand forecast for the second quarter by 500,000 barrels per day.
Oil prices rose on Friday amid renewed concerns over supply disruptions from Saudi Arabia and continued minimal tanker movement through the strategically vital Strait of Hormuz.
Despite the gains, crude was still on track for a weekly decline as market fears eased slightly following a fragile two-week ceasefire between the United States and Iran. At the same time, Israel indicated a possible diplomatic shift, expressing readiness to start direct negotiations with Lebanon soon.
Brent crude increased by $0.96, or 1%, to $96.88 per barrel at 0604 GMT, while West Texas Intermediate (WTI) gained $0.78, or 0.80%, reaching $98.65 per barrel.
Both benchmarks are down roughly 11% so far this week, marking their steepest weekly drop since June 2025, when earlier Israeli-U.S. strikes on Iran were paused.
According to Saudi Arabia’s state news agency SPA, citing the Ministry of Energy, attacks on key energy infrastructure have reduced the kingdom’s oil output capacity by about 600,000 barrels per day and cut throughput on the East-West Pipeline by approximately 700,000 barrels per day.
Analysts at ANZ noted that these developments have intensified concerns about further supply disruptions.
Shipping activity through the Strait of Hormuz remained below 10% of normal levels on Thursday, despite the ceasefire, as Iran asserted control by instructing vessels to stay within its territorial waters.
Although Iran and the U.S. agreed to a two-week ceasefire mediated by Pakistan, clashes reportedly continued afterward.
Experts suggest Pakistan may attempt to broker a longer-term agreement, but its ability to enforce the reopening of the waterway remains limited.
A Tehran official also told Reuters that Iran is seeking to impose transit fees on ships passing through the Strait under any peace arrangement, an idea opposed by Western governments and the U.N. shipping agency.
The conflict, which began on February 28 following U.S. and Israeli airstrikes on Iran, has effectively disrupted one of the world’s most important energy corridors.
Energy consultant John Paisie of Stratas Advisors warned that Brent crude could surge to $190 per barrel if current shipping constraints persist, though prices would be more contained if flows improve, albeit still above pre-war levels.
Mukesh Sahdev, CEO of XAnalysts, emphasized that the critical issue is not whether the Strait of Hormuz reopens, but how quickly normal oil flows can resume.
Meanwhile, JPMorgan estimated that around 50 energy infrastructure sites across the Gulf have been damaged by drone and missile attacks since the conflict began, with approximately 2.4 million barrels per day of refining capacity taken offline.
Goldman Sachs slightly lowered its second-quarter oil price outlook after the U.S.–Iran two-week ceasefire, which includes reopening the Strait of Hormuz, though it maintained its medium-term forecasts and warned that risks still lean to the upside.
Oil prices dropped to the mid-$90s per barrel following the announcement, in line with Goldman’s expectations that energy flows through the Strait would begin recovering quickly and that Persian Gulf exports would gradually return to pre-war levels within about a month.
The bank cut its Q2 forecasts for Brent and WTI to $90 and $87 per barrel, respectively, from earlier estimates of $99 and $91, citing a reduced geopolitical risk premium and early signs of improving oil flows. However, it left its second-half projections unchanged, with Brent seen at $82 and $80, and WTI at $77 and $75.
Despite the ceasefire, Goldman cautioned that the situation remains fragile and uncertain, with upside risks to prices driven by the possibility of prolonged disruptions or ongoing production losses. In a downside scenario where the ceasefire breaks down and reopening of the Strait is delayed, Brent could average $100 in Q4. In a more severe case involving sustained supply losses of 2 million barrels per day, prices could rise as high as $115.
On natural gas, European TTF prices fell sharply after the ceasefire. Goldman lowered its Q2 TTF forecast to 50 EUR/MWh from 70, citing weak Chinese LNG demand that has kept European supply relatively strong. Its second-half outlook remained broadly unchanged at 42 EUR/MWh, though risks are still skewed higher. If LNG flows are disrupted further, prices could surge above 75 EUR/MWh due to the need for significant demand destruction.
Markets have rebounded strongly after President Donald Trump chose to halt military action against Iran, but improved risk sentiment doesn’t change the bigger picture—oil prices are likely to stay elevated.
A clear relief rally is underway. US equity futures jumped almost immediately following the announcement of a two-week pause, with the Dow, S&P 500, and Nasdaq-100 all moving sharply higher. Meanwhile, oil prices, which had surged on fears of supply disruptions in the Strait of Hormuz, retreated as traders quickly unwound worst-case positions.
The speed of the reaction highlights how markets had been positioned for escalation. Defensive strategies were widespread, volatility was high, and crude prices had already priced in a significant geopolitical premium. Removing even part of that risk triggered a rapid reversal.
This strong rally also reflects how stretched investor sentiment had become. Markets were preparing for a scenario where a substantial share of global oil supply could be disrupted. Even a temporary easing of those fears prompted a swift shift back into equities.
Equity markets had already hinted at a possible de-escalation. Despite increasingly aggressive rhetoric, indices had begun to stabilize, suggesting investors anticipated some form of pause. The confirmation has now accelerated the move back into risk assets.
Technology stocks are expected to lead the recovery. The sector had been hit hardest by rising yields and risk aversion, but slightly lower oil prices help ease inflation concerns, supporting valuations—especially for large-cap and AI-driven companies.
Consumer sectors should also benefit quickly. Lower oil prices reduce fuel costs, boosting household purchasing power. Airlines, travel firms, and retailers are particularly well positioned to gain from improved sentiment and lower input expenses.
Financial stocks are also likely to rise. Greater stability encourages deal-making, strengthens capital markets activity, and eases pressure on credit conditions. Banks typically perform better when uncertainty declines and risk appetite increases.
Energy stocks, however, face a more mixed outlook. In the short term, falling crude prices may weigh on them. But underlying supply constraints remain unresolved, inventories are still tight, and geopolitical fragmentation continues to influence energy flows.
There’s a reason oil prices remain significantly higher this year. The risks go beyond the current conflict. Even if shipping through Hormuz resumes, it only provides temporary relief and does not fix deeper vulnerabilities in global energy supply chains.
As a result, oil is unlikely to fall back to previous lows anytime soon. A geopolitical premium is now built into prices, and traders will continue to factor in the risk of renewed disruptions.
Attention now turns to whether the two-week pause will hold. Temporary ceasefires often come with uncertainty, effectively starting a countdown. Markets will be watching closely to see if diplomacy can turn this into a longer-term solution.
Key factors include compliance with the pause, coordination over shipping routes, and the tone of ongoing negotiations. Meaningful progress could extend the rally further, lifting industrials, cyclical sectors, and emerging markets.
However, if diplomacy fails, sentiment could reverse quickly. Oil prices would likely surge again, volatility would return, and recent equity gains could be erased.
For now, investors are navigating a narrow path between opportunity and risk. The current rally is driven by reduced immediate fear, but underlying tensions remain unresolved—and energy markets continue to reflect that uncertainty.
Positioning for short-term gains may be reasonable, but any sustained upside will depend entirely on whether diplomatic efforts lead to lasting progress.
Gold prices declined in Asian trading on Thursday, ending a four-session rally as markets responded to renewed escalation signals from U.S. President Donald Trump regarding the Iran conflict.
Spot gold was last down 1.4% at $4,693.12 per ounce as of 22:21 ET (02:21 GMT), after briefly reaching an intraday high of $4,800.58. U.S. gold futures also fell nearly 2% to $4,721.80 per ounce.
Market sentiment shifted after Trump stated in a televised address that the U.S. would intensify military action against Iran over the next “two to three weeks,” reaffirming Washington’s position on blocking Iran from acquiring nuclear weapons. He added, “We’re going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Ages where they belong.”
The comments contrasted with earlier remarks this week suggesting the U.S. could withdraw from the conflict within a similar timeframe, even without a formal agreement.
Financial markets have remained highly reactive to changing rhetoric on the conflict as investors reassess geopolitical risk. Oil prices rebounded following Trump’s remarks, raising concerns about inflationary pressures that could keep interest rates higher for longer and reduce demand for non-yielding assets like gold.
The U.S. dollar also strengthened after two consecutive losing sessions, further weighing on gold by making it more expensive for foreign buyers.
Investors are now focused on upcoming U.S. jobs data due Friday for signals on the Federal Reserve’s policy direction, a key driver for precious metals.
Elsewhere in metals, silver dropped 3.2% to $72.77 per ounce, while platinum slipped 1.7% to $1,934.60 per ounce.
Oil jumped over 4% on escalation fears.
Oil prices surged by more than $4 on Thursday after U.S. President Donald Trump said the United States would continue military strikes against Iran, including energy and oil infrastructure, over the coming weeks, while offering no clear timeline for ending the conflict.
Brent crude futures jumped $4.88, or 4.8%, to $106.04 per barrel at 0200 GMT, while U.S. West Texas Intermediate (WTI) crude rose $4.17, or 4.2%, to $104.29 per barrel.
The rally followed earlier weakness, as both benchmarks had dropped by more than $1 earlier in the session ahead of Trump’s address and closed lower in the prior trading day.
In his televised national speech, Trump said U.S. forces had nearly achieved their objectives in the conflict with Iran and that the war was approaching its conclusion, though he did not specify a timeframe. “We are going to finish the job, and we’re going to finish it very fast. We’re getting very close,” he said.
Geopolitical risks in the region have escalated, with threats to maritime shipping increasing. On Wednesday, an oil tanker chartered by QatarEnergy was struck by an Iranian cruise missile in Qatari waters, according to the country’s defence ministry.
Meanwhile, the head of the International Energy Agency warned that supply disruptions are beginning to affect Europe’s economy, with the region having previously relied on pre-war contracted oil shipments.
A massive oil tanker near Dubai was struck by an Iranian attack following the latest threats from Trump.
Iran struck and set fire to a fully laden crude tanker near Dubai on Monday, as President Donald Trump warned Washington would destroy Iran’s energy infrastructure if Tehran failed to reopen the Strait of Hormuz. The targeted vessel, the Kuwait-flagged Al-Salmi, is the latest in a series of attacks on commercial shipping using missiles and drone strikes in the Gulf since U.S. and Israeli forces hit Iran on February 28.
The conflict, now a month old, has expanded across the Middle East, causing heavy casualties, disrupting energy flows, and raising fears of a global economic downturn. Oil prices briefly surged again following the attack on the tanker, which has a capacity of roughly 2 million barrels valued at over $200 million. Its owner, Kuwait Petroleum Corp, said the strike occurred early Tuesday, igniting a fire and damaging the hull, though no injuries were reported. Dubai authorities later confirmed the blaze had been contained after what they described as a drone strike.
Rising oil and fuel costs are beginning to strain U.S. households and pose a political challenge for Trump and Republicans ahead of November’s midterm elections, particularly after pledges to cut energy prices and boost domestic production. Gasoline prices in the U.S. climbed above $4 per gallon for the first time in more than three years, according to GasBuddy, as tighter global supply pushed crude above $101 per barrel.
Meanwhile, hostilities show no sign of easing, with concerns mounting over a broader regional war. Iran-aligned Houthi forces have launched missiles and drones at Israel, while Turkey reported intercepting a ballistic missile from Iran that briefly entered its airspace. Israel has carried out strikes on targets in Tehran and Hezbollah-linked sites in Beirut, with explosions reported across parts of the Iranian capital and power outages affecting some districts.
The Israeli military said four of its soldiers were killed in southern Lebanon, where recent incidents have also claimed the lives of UN peacekeepers. Iran’s military stated its latest wave of attacks targeted U.S. bases and Israeli positions across the region.
The U.S. has begun deploying thousands of troops from the 82nd Airborne Division to the Middle East, signaling potential escalation even as diplomatic efforts continue. The White House said Trump aims to secure a deal with Iran before an April 6 deadline to reopen the Strait of Hormuz, a key route for roughly one-fifth of global oil and LNG shipments.
While U.S. officials say talks are progressing, Iran has dismissed proposed terms as unrealistic, insisting it is focused on defense amid ongoing attacks. Trump reiterated both optimism for a deal and a renewed threat to destroy Iran’s energy facilities if no agreement is reached, though reports suggest he may be open to ending military operations even if the strait remains partially closed.
Oil prices later eased and equities recovered on hopes of de-escalation. Still, the administration is weighing further steps, including seeking financial contributions from Arab allies, as it requests an additional $200 billion in war funding—an effort likely to face resistance in Congress.
Oil and war fears dominate markets heading into an uncertain Q2.
Financial markets enter the second quarter on shaky ground, highly sensitive to war-related headlines. This environment raises the risk of deeper equity declines, while the sharp selloff in bonds may start to attract buyers.
Even if the conflict eases soon, investors believe lasting damage to Middle East energy infrastructure and persistently high oil prices will weigh on growth and keep inflation elevated. That combination could further pressure stocks, though if growth fears begin to outweigh inflation concerns, bonds may stage a recovery.
Seema Shah, chief global strategist at Principal Asset Management, noted that uncertainty dominates: it’s hard for investors to see beyond the constant flow of geopolitical news. While diversification into international equities remains appealing, she emphasized that U.S. exposure still plays an important role.
The Middle East conflict caps a volatile first quarter also shaped by U.S. geopolitical moves and rapid AI-driven disruption. Oil has been the standout performer, surging about 90% to above $100 a barrel, which has shaken bond markets and pushed expectations for higher interest rates.
Analysts surveyed by Reuters see oil ranging from $100 to $190 if supply disruptions persist, with an average forecast around $134. Meanwhile, prediction platform Polymarket assigns roughly a one-third chance of the war ending by mid-May and a 60% likelihood by late June.
Echoing the inflation surge of 2022, short-term borrowing costs in countries like Britain and Italy have jumped sharply, with notable moves also seen in U.S., German, and Japanese bonds. According to Societe Generale strategist Manish Kabra, the key factors for markets are how long the oil shock lasts and how central banks respond.
Since the war began, expectations for U.S. rate cuts this year have largely disappeared. In Europe and the UK, investors now anticipate rate hikes instead of easing, while hopes for monetary loosening in emerging markets have faded.
Kabra highlighted the upcoming U.S. Memorial Day weekend as a potential pressure point, as rising travel demand could intensify public and political focus on energy prices. Reflecting this backdrop, he has increased exposure to commodities in portfolios.
Bond markets have taken a hit, with yields rising sharply, but some investors see value emerging. Amundi, for instance, has added short-term eurozone government bonds and maintained positions in U.S. Treasuries, expecting central banks to look past short-term inflation spikes once the crisis stabilizes.
Similarly, Russell Investments sees bonds as more attractive than a few months ago and expects the dollar’s recent strength—up over 2% in March—to fade over time. Before the conflict, investors had been rotating away from U.S. assets, a trend that could resume if tensions ease.
Gold has slipped about 4% in March, as investors sell profitable positions to offset losses elsewhere, despite its usual role as an inflation hedge.
Equities, while initially resilient thanks to strong earnings and the tech sector, are now under pressure. The S&P 500 and Europe’s STOXX 600 have fallen roughly 9–10% from recent highs, and Japan’s Nikkei has dropped nearly 13% from its February peak.
Zurich Insurance strategist Guy Miller said his firm has shifted to an underweight position in equities as the economic outlook deteriorates. Data already points to weakening momentum, with U.S. consumer sentiment declining, German investor confidence dropping sharply, and business activity indicators hitting multi-month lows.
Although the U.S. benefits from a relatively strong economy and its status as an energy exporter, it is not immune. Prolonged high energy prices would still weigh on growth. The OECD has already warned that the global economy has been knocked off a stronger growth trajectory.
Miller concluded that this conflict differs from recent geopolitical shocks, which had limited market impact—this time, the implications for earnings, margins, and valuations are far more significant.
Gold prices edged up slightly as attention remains on the escalating Iran conflict.
Gold edged higher in Asian trading on Monday, recovering modestly after a volatile week, as investors continued to watch the risk of escalation in the U.S.–Israel conflict with Iran.
Spot gold gained 0.4% to $4,509.51 an ounce, with futures rising similarly to $4,537.40. Prices had swung sharply last week, dropping to around $4,000 before rebounding close to $4,500 by Friday.
Other precious metals were mixed, with silver slipping 0.9% while platinum advanced 1.8%.
Analysts at OCBC said the recent rebound in gold appears largely technical, following a steep decline of about 20% since the conflict began. While bearish pressure is easing and momentum indicators are improving, they cautioned that the recovery may struggle to hold unless prices break above key resistance levels at $4,624, $4,670, and $4,850 per ounce.
They also warned that persistently high energy prices could keep inflation elevated, potentially pushing Treasury yields higher and creating a less favorable environment for gold in the near term.
Meanwhile, geopolitical tensions remained high after Iran-backed Houthi forces in Yemen launched attacks on Israel over the weekend, raising fears of a broader conflict. Iran signaled readiness for a possible U.S. ground invasion, amid reports that Washington is deploying additional troops to the Middle East.
U.S. President Donald Trump said negotiations with Iran were progressing and a deal could be near, though he provided no clear timeline and warned that further strikes on Tehran remain possible. He also recently extended a deadline for potential attacks on Iran’s energy infrastructure into early April.
Oil prices jumped above $115 per barrel after Yemen’s Houthi forces launched an attack on Israel.
Oil prices surged in early Monday trading after Yemen’s Houthi group launched attacks on Israel, raising fears of a wider Middle East conflict.
Brent crude jumped 2.2% to $115.08 a barrel, after briefly spiking as high as $116.43.
The Iran-backed Houthis said they had fired multiple missiles at Israel and warned of further strikes, heightening concerns about escalation—especially given their ability to target vessels in the Red Sea.
Tensions remained elevated as Israeli forces struck targets in Tehran, while the U.S. deployed 3,500 troops to the region aboard the USS Tripoli. Iran also signaled readiness for a potential U.S. ground operation.
Oil prices have rallied sharply in March, with Brent up nearly 60%, driven by severe supply disruptions. Iran’s effective blockade of the Strait of Hormuz—a route carrying about 20% of global oil supply—has intensified market fears.
While Pakistan has offered to host talks between Washington and Tehran following a U.S. ceasefire proposal, Iran has largely rejected direct negotiations and accused the U.S. of preparing for a ground invasion.
Cuba seeks Vatican help to ease the U.S. oil embargo, the Washington Post reports.
Cuban officials have asked the Vatican to help convince the administration of U.S. President Donald Trump to relax its oil embargo, raising the issue in high-level meetings with Vatican representatives, including Pope Leo, the Washington Post reported Friday, citing sources familiar with the discussions.
Reuters said it could not immediately confirm the report, and the Vatican, the White House, and the Cuban government did not respond to requests for comment.
Havana and Washington began talks earlier this month as the embargo intensifies economic pressures on the Communist-led country, with some reports indicating the Trump administration may be aiming to remove President Miguel Díaz-Canel from power.
Oil edges higher but is still on track for its first weekly drop since the Iran conflict began.
Oil prices rose on Friday but were still set for their first weekly decline since February 9, after U.S. President Donald Trump extended a pause on strikes against Iran’s energy facilities. Despite the temporary restraint, investors remain cautious about the chances of a ceasefire in the month-long conflict.
Brent crude climbed $1.87 (1.73%) to $109.88 a barrel, while U.S. West Texas Intermediate (WTI) gained $1.57 (1.66%) to $96.05. Even so, both benchmarks were down on the week, with Brent slipping 2.1% and WTI losing 2.3%, though they have surged sharply since the conflict began.
Analysts noted that oil markets are being driven more by the potential duration of the war than short-term headlines, warning that any damage to infrastructure or prolonged fighting could push prices significantly higher. Trump has extended a deadline to April 6 for Iran to reopen the Strait of Hormuz or face further action, while the U.S. continues to build up military presence in the region and considers targeting key Iranian oil assets.
Iran has rejected a U.S. proposal relayed via Pakistan, calling it unfair. Meanwhile, the conflict has removed around 11 million barrels per day from global supply, worsening an already tight market. Analysts say prices could fall quickly if tensions ease, but remain elevated overall—or even spike to $200—if the war drags on into late June, as countries increasingly draw on reserves and adjust demand.
Since fighting with Iran erupted on Feb. 28, energy stocks have stood out as some of the few consistent winners for bullish investors—until a social media post from President Trump triggered a drop in oil prices, dragging energy shares down with it. The episode underscored how fragile markets are right now, where even a single headline can spark sharp swings.
That’s why recent remarks from Chevron CEO Mike Wirth carry weight. He warned that markets may be underestimating the impact of potential supply disruptions, particularly if Iran closes the Strait of Hormuz—a key route that typically handles about 20% of global oil flows . According to Wirth, pricing is being driven more by perception than solid information, even as investors are flooded with conflicting data.
Still, his view shouldn’t be dismissed as self-serving. With decades of operational experience in volatile regions like Venezuela, Wirth understands how deeply disruptions can affect supply chains—and how long it can take for markets to stabilize again.
As a result, even if oil avoids extreme scenarios—such as the $200-per-barrel projections floated by some analysts—consumers may still face elevated fuel prices for an extended period. For investors who missed the initial rally, opportunities may still exist, particularly across different segments of the energy sector.
Big Oil Momentum: Chevron at the Forefront in a Supply-Constrained Market
Among major oil companies, Chevron stands out as a top pick. Its stock (CVX) has surged nearly 33% in 2026, breaking out of a multi-year range that had held since 2022.
Much of this rally followed U.S. military actions in Venezuela, where Chevron uniquely maintains operations among international oil firms.
That said, investors may question whether the stock is vulnerable to a pullback if tensions in the Strait of Hormuz ease. Currently, CVX trades about 11% above its average analyst price target. Still, those targets are being revised upward, with the most optimistic call from Piper Sandler lifting its target to $242 from $179.
Over the past three years, Chevron has delivered roughly 50% total returns—modest for growth-focused investors, but notable given its reputation as a reliable dividend payer. Even after its recent rally, the stock offers a 3.5% yield, reinforcing its appeal as a blend of income and stability.
Refining Edge: Valero Benefits from Volatility and Expanding Margins
While Chevron represents upstream exposure, Valero Energy provides a different angle—pure refining. This makes it well-positioned even in volatile oil markets.
Unlike producers, refiners profit from the “crack spread,” or the gap between crude input costs and refined product prices. Supply disruptions that hurt producers can actually boost refining margins.
Valero, the world’s largest independent refiner, operates 15 facilities across North America and the U.K., giving it both scale and flexibility—especially valuable if supply routes shift due to geopolitical risks.
Its stock (VLO) has climbed over 45% in 2026, now trading about 20% above consensus targets. While somewhat extended, analysts continue to raise expectations. Meanwhile, investors benefit from a dividend yield near 2%, offering a mix of cyclical upside and income.
Midstream Stability: Enbridge Delivers Income with Volume-Driven Growth
Another way to play the energy rally is through midstream operators like Enbridge, which function more like toll collectors for oil and gas flows.
These companies earn fees based on volume rather than commodity prices—and volumes are currently near record highs in early 2026.
Enbridge is one of the largest pipeline operators in North America, with over 18,000 miles of infrastructure, transporting roughly 30% of the region’s crude oil and about 20% of U.S. natural gas demand.
Over the past three years, ENB has returned around 80%, highlighting the consistency of midstream performance. With a consensus price target implying nearly 20% upside and a dividend yield around 5.1%, Enbridge offers a compelling combination of steady income and moderate growth.
Oil prices inched up as Iran considers the U.S. plan to end the conflict.
Oil prices in Asia inched up on Thursday as mixed signals over Middle East de-escalation kept markets cautious, while Iran considered a U.S. proposal to end the conflict.
By 20:31 ET (00:31 GMT), May Brent crude rose 0.8% to $103.02 per barrel and WTI crude gained 1% to $91.20, after both benchmarks dropped more than 2% in the previous session.
Traders assessed tentative diplomatic developments from Tehran, where authorities are said to be reviewing a U.S.-supported plan to stop the fighting. Although Iran has yet to accept the proposal, it has not rejected it outright, fueling guarded optimism for easing tensions.
However, uncertainty remains high. Tehran has denied direct talks with Washington and signaled that major disagreements persist, leaving markets uneasy and price moves relatively muted.
Crude has seen sharp swings in recent weeks as the conflict disrupted supply flows from the Gulf, a key global oil hub. Earlier this month, Brent surged past $119 per barrel on concerns over potential supply outages.
The Strait of Hormuz—through which about one-fifth of global oil passes—remains a critical risk point, with any disruption likely to drive prices higher.
On Wednesday, prices fell as reports of possible negotiations eased some geopolitical risk premium. Meanwhile, investors are monitoring Washington’s stance, as officials warn of tougher action if Iran fails to engage, adding further uncertainty to the outlook.
Gold holds steady as markets weigh conflicting signals over potential de-escalation between the U.S. and Iran.
Gold prices were mostly stable in Asian trading on Thursday as investors navigated mixed signals surrounding the Iran conflict, while Tehran continued to assess a U.S. proposal to end the war.
Spot gold edged up 0.1% to $4,509.06 an ounce by 22:57 ET (02:57 GMT), while U.S. gold futures declined 1.1% to $4,536.10.
Bullion had recovered earlier in the week, climbing back above $4,500 after a sharp pullback, supported by a weaker dollar and cautious optimism over potential U.S.-Iran diplomacy.
Still, gains were limited as uncertainty persisted. Iran is reviewing a U.S.-backed plan to halt hostilities, but unclear signals on whether talks will advance have kept investors wary.
Although Tehran has not formally accepted the proposal, it has avoided rejecting it outright, fueling guarded hopes for de-escalation. At the same time, Iran has denied direct negotiations with Washington and emphasized that key differences remain unresolved, leaving markets uneasy.
The U.S. has also warned of tougher action if Iran fails to engage constructively, adding another layer of tension.
Gold—traditionally a safe-haven asset—has shown unusual volatility in recent weeks. Prices dropped sharply earlier this month despite rising geopolitical risks, as expectations of prolonged high interest rates and a stronger dollar weighed on demand.
Movements in oil prices have also influenced sentiment. Rising crude has heightened inflation concerns, reinforcing expectations that central banks may keep rates elevated, which tends to pressure non-yielding assets like gold.
Wider financial markets reflected a cautious tone, with investors seeking clearer direction on both geopolitical developments and global monetary policy.
Among other precious metals, silver gained 0.1% to $71.32 an ounce, while platinum slipped 0.6% to $1,918.60.
Oil dropping below $95 signals that the market is easing its worst-case fears, though the underlying structural risks remain. Gold’s rally points to a dovish policy interpretation, with traders anticipating a gentler rate path rather than outright risk hedging. Equities are following signs of easing inflation, yet the system remains fragile and sensitive to headlines.
Light at the End of the Tunnel
Asian traders woke to what feels like a soft glow at the tunnel’s end.
Oil has slipped below $95, equities are rising, yields are easing, and the dollar is softening as Washington’s diplomatic push starts to feel less like theatre and more like a path markets can tentatively follow. A 30-day ceasefire is no longer just a line in a briefing note—it’s starting to look like a trackable reality.
But this is still glow, not full daylight.
Crude’s decline reflects the market dimming emergency lighting, not declaring the room safe. Traders are beginning to believe the fire may be contained. The panic premium is being dialed down, not switched off. And that subtlety is where trades live or die.
The underlying system remains fragile. The Strait of Hormuz is still the key conduit for global energy flows, flickering under geopolitical tension. Confidence isn’t restored by proposals; it returns when flows run smoothly, insurance risks normalize, and barrels shed their geopolitical premium.
For now, the market follows the beam rather than stepping fully into the open.
Equities lean into it: S&P futures rise as lower oil feeds softer inflation expectations, easing central bank pressure and reopening the risk door. This is expectation-driven, not confirmation-driven.
Bond markets move cautiously. Yields edging lower show traders shading their views rather than rewriting them. The dollar eases as hedges trim slightly; risk isn’t gone, just loosened.
Gold, meanwhile, is stepping further into the light. It rallies not out of fear but in forward pricing—anticipating a softer policy path as oil slips and inflation pressures ease. Bullion is accumulating because markets see central banks nudged closer to a pivot.
This is the tell: when gold rises alongside equities and softer yields, the market isn’t just trading risk—it’s trading policy.
And yet, the barrel still holds the switch.
Even below $95, oil remains the power source for the macro grid. Diplomacy can dim the lights, but full power returns only when the physical system stabilizes. Gains won’t unwind because of negotiations; they unwind when supply chains flow, inventories rebuild, and disruption is no longer priced as baseline.
We’re not there yet.
What we see is the market cautiously walking toward the light: sentiment improving, volatility compressing, risk returning in measured doses. But the wiring underneath remains exposed.
The tunnel is visible. The way forward is clearer. But until that light becomes open sky, every step carries the risk of the switch being flipped back.
Gold rises on softer dollar, lower oil after U.S. proposal.
Gold surged more than 2% during Asian trading on Wednesday, driven by falling oil prices and a softer U.S. dollar. Hopes of a potential Middle East ceasefire eased inflation concerns, increasing the appeal of the metal.
Spot gold rose 2.3% to $4,577.55 per ounce, while U.S. gold futures climbed 4% to $4,611.70.
The move came as reports emerged that the United States had proposed a 15-point plan to Iran aimed at ending the conflict. President Donald Trump said negotiations were ongoing and noted that Iran appeared willing to reach a deal. However, Iranian officials denied any talks, underscoring continued uncertainty.
Oil prices dropped sharply after earlier gains fueled by supply disruption fears, with Brent crude slipping below $100 per barrel. This decline helped ease inflation expectations, reducing pressure on central banks to maintain high interest rates.
Lower energy prices also weighed on bond yields and the dollar—factors that typically support gold, which does not yield interest. The U.S. Dollar Index slipped 0.2% in early trading.
Gold had recently been under pressure due to rising oil prices and bond yields, which strengthened the dollar and triggered a broader selloff in precious metals.
Despite the rebound, analysts warned that volatility is likely to continue, as markets remain highly sensitive to developments in the Middle East.
Elsewhere, silver jumped 3.3% to $73.60 per ounce, and platinum rose 2.2% to $1,977.60.
Oil drops on Middle East ceasefire hopes.
Oil prices dropped about 4% on Wednesday as hopes of a potential ceasefire in the Middle East raised expectations that supply disruptions from the region could ease. The decline followed reports that the U.S. had delivered a 15-point proposal to Iran aimed at ending the conflict.
Brent crude fell $4.89 (4.7%) to $99.60 per barrel, after hitting a low of $97.57. U.S. West Texas Intermediate (WTI) slipped $3.54 (3.8%) to $88.81, touching as low as $86.72. This came after both benchmarks had surged nearly 5% in the previous session before trimming gains amid volatile trading.
Analysts said growing optimism over a ceasefire, along with profit-taking, pressured prices. However, uncertainty over whether negotiations will succeed continues to limit further declines.
U.S. President Donald Trump stated that progress was being made in talks with Iran, while sources confirmed Washington had sent a detailed settlement plan. Reports also suggested the U.S. is pushing for a temporary ceasefire to facilitate discussions, including measures such as curbing Iran’s nuclear program and reopening the Strait of Hormuz.
Despite this, some analysts remain cautious, warning that Middle East developments will continue to drive price swings in the near term.
The conflict has severely disrupted oil and LNG shipments through the Strait of Hormuz—responsible for roughly one-fifth of global supply—creating what the International Energy Agency has described as an unprecedented supply shock.
Even if a ceasefire is reached and flows resume, experts say it is unclear how quickly production will fully recover, especially without confidence in a lasting agreement.
Meanwhile, diplomatic efforts continue, with Pakistan offering to host negotiations, and Iran indicating that non-hostile vessels may pass through the Strait if coordinated with its authorities. Still, military activity in the region persists, and the U.S. is reportedly preparing to deploy additional troops.
To offset disruptions, Saudi Arabia has ramped up exports via its Red Sea Yanbu port to nearly 4 million barrels per day.
In the U.S., inventory data added further pressure to prices, with crude stocks rising by 2.35 million barrels, gasoline up 528,000 barrels, and distillates increasing by 1.39 million barrels last week, according to industry estimates.
The market is taking a breather on recent headlines, but the fundamental energy system is still disrupted, constrained, and far from normal. Interruptions in LNG and damage to infrastructure have turned what might have been a temporary flow shock into a long-term supply issue, likely keeping both oil and LNG prices elevated. Current relief rallies are fueled by short-term positioning and changing narratives rather than a lasting recovery, making this market one to trade actively rather than commit to for the long term.
The market is taking a breather. Netanyahu’s comments—talking about securing the Strait and neutralizing Iran’s nuclear and missile capabilities—have soothed sentiment, suggesting the conflict might burn out sooner than feared. But even if the geopolitical chapter closes, the energy system doesn’t reset instantly. Repairing refineries, export terminals, and LNG infrastructure takes time, and confidence in shipping lanes cannot be rebuilt with statements alone. Brent remains above $105; calm on the surface, but the underlying disruption persists.
Oil dipped, sparking reflex rallies in equities, bonds, and volatility, as markets embraced the idea that the Strait might reopen and Iran’s enrichment and missile capacities are weakened. Relief rallies are thus more about positioning than a lasting recovery. Traders are playing the tape, not committing to the story.
The Gulf’s energy infrastructure has been directly hit. LNG outages aren’t temporary—they’re structural, keeping prices elevated even after headlines fade. The IRGC still has enough capability to cause damage, so the market remains tight. Brent dropping below $90 next month seems overly optimistic; elevated oil prices could persist for months.
Equities face a dilemma: hoping for normalization while input costs remain high and central banks stay firm. The bounce from lows is likely headline-driven short covering, not genuine repricing of risk.
Complicating matters, traders are entering one of the largest options expiries ever. With narratives unstable, any headline can trigger outsized moves as positioning resets in real time. Oil charts reflect this chaos: Brent spiked toward $119 on export rumors, then fell below $110 when denied, then drifted lower again on de-escalation headlines. It’s a market still on edge.
Yes, volatility eased, and the market can breathe for now. But the barrel remembers the fire, and the underlying disruptions remain.
What would happen if the U.S. stopped exporting WTI and Brent crude became available only through bids?
Yesterday, the Brent-WTI spread was the headline, and it set the tone for a conversation I had with a few veteran oil traders just before Washington denied any plans to ban U.S. crude exports. These are the people who’ve seen enough market cycles to distinguish a normal move from a market that’s beginning to think. As we ran through tail-risk scenarios, the discussion drifted into territory that felt increasingly uncomfortable.
This wasn’t the usual chatter about positioning, freight, or refinery runs. It was the kind of conversation where the scenario branches began to converge on outcomes that felt plausible—but alarming. I’m not sharing this to shock anyone, but it’s worth understanding what was being analyzed in the world of constant motion we call capital markets. The Brent-WTI blowout wasn’t just a price swing; it was the market quietly testing what could happen if the system itself started to fragment.
On the surface, it looked like a classic geopolitical squeeze: Middle East disruptions lifted Brent, while rising U.S. output weighed on WTI. Beneath the surface, though, a more structural concern emerged. What if the U.S. pulled back—by limiting exports or scaling down its role as the security backstop keeping energy flowing? The mechanics were simple but severe. WTI, being inland, depends on pipelines, storage, and export capacity. Brent, by contrast, is seaborne and priced assuming secure transit. As long as U.S. exports flowed, the arbitrage held, helping balance the global market. But if that valve closed even partially, the market effectively split in two.
Inside the U.S., crude would back up, storage would fill, refinery constraints would bite, and WTI would be forced to clear at a deeper discount. Outside the U.S., the opposite occurred: removing a few million barrels of flexible exports from a system already strained by Middle East risk made every waterborne barrel more valuable. Brent didn’t just rise from lost supply—it repriced the risk of getting oil from point A to point B. Layer in talk of U.S. troop withdrawals and reduced global security commitments, and the market started pricing something far more structural. This wasn’t about barrels alone; it was about the security architecture that enabled their movement.
Here’s where the real asymmetry appeared: the U.S. risked sitting on cheap, trapped crude, while Europe and Asia were forced into a bidding war for mobile supply at a time when mobility was less reliable. Asia felt it first through direct dependence on Middle East flows, Europe through prices and products—but both ended up paying for a world where oil wasn’t just produced, it was contested. The Brent-WTI spread ceased to be a simple arbitrage signal and became a stress indicator for a market increasingly pricing a disconnect between where oil sits and where it can actually go.
In that scenario, oil stops trading like a commodity and starts trading like a map of power: Brent becomes insured crude, WTI becomes stranded crude, and the rest of the world pays a premium for access.
Buying oil in Asia or jet fuel in Europe right now comes at record prices. Physical markets—where oil is traded as cargo on ships, railcars, or in storage—have surged faster than futures markets, as refiners and traders scramble to fill the massive supply gap caused by the U.S.-Israeli conflict with Iran.
The disruption, triggered by attacks on oil and gas facilities across the Middle East, is the largest ever in global energy, with Iran restricting traffic through the Strait of Hormuz, a key route for 20% of the world’s oil. Dennis Kissler of BOK Financial warned that even if the strait reopens, logistics challenges will delay a supply recovery.
Oil, gas, and refined products are vital for transport, shipping, and manufacturing, so supply shocks can heavily impact economies and demand for months or even years. Gulf production cuts and export halts have removed roughly 12 million barrels per day—about 12% of global daily demand—which are hard to replace, according to Petro-Logistics.
Physical Market Spike While futures prices have risen steadily since late February, physical cargo prices have surged even more. Brent crude briefly hit $119 per barrel, later settling near $109, while Middle East Dubai crude reached a record $166.80. Goldman Sachs predicts Brent could surpass its 2008 peak of $147.50 if outages continue. European and African crude cargoes hit $120, and even previously discounted Russian barrels now exceed $100.
The Mediterranean market, calm until early this week, has risen as expectations for a quick Hormuz reopening fade. David Jorbenaze of ICIS noted that spot price differentials reveal a much tighter market than headline prices suggest.
Seeking Sour Crude Refiners are turning to substitutes for Middle Eastern medium-density, high-sulphur “sour” crude. Russian Urals crude, long discounted due to sanctions, recently traded above Brent in India for the first time. Norwegian Johan Sverdrup crude reached an $11.30 premium to Brent. U.S. crude prices rose, with Mars Sour in the Gulf of Mexico hitting $107.53, about $6 above U.S. crude, reflecting its similarity to Middle Eastern oil.
Transport fuels have climbed even higher: European jet fuel hit around $220 per barrel, diesel exceeded $200, and Asian gasoil margins topped $60 per barrel. Measures such as the IEA’s release of 400 million strategic barrels and U.S. sanction waivers for Russian oil may not suffice. As Jorbenaze emphasized, “The market ultimately runs on barrels moving, not barrels being announced.”
Oil slips as the U.S. and allies move to ease supply constraints and reopen the Strait of Hormuz.
Oil prices dipped on Friday as European nations and Japan offered to help secure safe shipping through the Strait of Hormuz, while the U.S. outlined measures to boost supply.
U.S. Treasury Secretary Scott Bessent indicated sanctions on Iranian oil stuck on tankers could soon be lifted, and further releases from the U.S. Strategic Petroleum Reserve were possible. Brent fell $1.36 (1.3%) to $107.29 a barrel, and West Texas Intermediate (WTI) dropped $1.92 (2.0%) to $94.22.
Despite Friday’s decline, Brent is on track for a nearly 4% weekly gain after Iran targeted Gulf energy facilities, forcing production cuts. WTI, however, is set for its first weekly drop in five weeks, down more than 4%.
Markets eased some “war premiums” as world leaders signaled restraint, though analysts warn that full recovery of tanker logistics through Hormuz could take time. Any new attacks or disruptions could push prices higher, while diplomatic engagement may limit spikes and unwind the war premium.
Britain, France, Germany, Italy, the Netherlands, and Japan issued a joint statement offering assistance to ensure safe passage through Hormuz, which handles 20% of global oil and LNG flows.
U.S. President Donald Trump reportedly told Israeli Prime Minister Netanyahu not to strike Iranian energy facilities again. Meanwhile, North Dakota plans to increase crude output as wells restart and winter restrictions lift, though the pace will depend on oil prices and existing budgets.
Oil exports and production in the Middle East have plunged, wiping out more than 7–10 million barrels per day from global supply and triggering a significant physical shortage.
With supply tight and storage capacity limited, prices could climb to $150–$200+ per barrel, and some analysts caution that prolonged disruptions may drive even sharper spikes.
Even if the conflict subsides, a recovery is likely to be gradual, and any short-term relief won’t fully make up for the deficit, keeping prices elevated.
Just a month ago, any analyst predicting oil could surge to $200 per barrel would have been dismissed outright. Now, that scenario is increasingly being taken seriously—and for good reason.
Middle Eastern oil and fuel exports, which averaged over 25 million barrels per day in February, have plunged by nearly two-thirds by mid-March, according to data from Kpler and Vortexa. Even more concerning is production: across the region, output is being slashed, with wells not easily or quickly restarted. Limited storage is forcing producers to cut supply, and in some cases, oil is being stored offshore rather than delivered to buyers. Altogether, roughly a fifth of global oil supply is severely disrupted, and even if the conflict ended immediately, recovery would take time.
Production cuts are substantial: Iraq alone has reduced output by around 2.9 million barrels per day, while Saudi Arabia has cut between 2 and 2.5 million. The UAE and Kuwait have also made significant reductions, bringing total lost supply to over 7 million barrels daily. This stands in stark contrast to earlier expectations from the International Energy Agency, which had forecast a surplus this year. Instead, as much as 10 million barrels per day may now be offline.
With physical supply constrained, the market has little ability to respond to demand, pushing prices sharply higher and making them slow to fall even if conditions improve. Some analysts now see $150 oil as a baseline, with $200 or higher no longer out of the question. Others warn that prices could spike even further in a sustained shortage, as commodity markets tend to move dramatically under such conditions.
That said, not all forecasts are bullish. Some expect prices to retreat below $100 for Brent and $90 for WTI if the conflict ends quickly—though there are few signs of that happening. Even in a best-case scenario, restarting production would take months, meaning prices would likely remain elevated due to lingering supply constraints.
Temporary relief has come from increased availability of sanctioned Russian oil, with nearly 200 million barrels currently in transit globally. However, this is unlikely to fully offset the shortfall. Meanwhile, measures like China restricting fuel exports and cutting refining rates, or the potential restart of limited pipeline flows from Iraq and Kurdistan, are unlikely to significantly ease the imbalance.
What once seemed unthinkable—a $200 oil price—is now within the realm of possibility. Still, given the economic strain such levels would impose worldwide, there is hope that de-escalation efforts may eventually prevent the most extreme outcomes.
Trump is expected to pressure Japan to support the Iran conflict during a White House meeting.
Donald Trump is expected to use a White House meeting with Japan’s prime minister, Sanae Takaichi, to seek support for the war against Iran, putting Tokyo in a difficult position as it weighs how much assistance it can offer.
Although Trump has criticized allies for their limited backing of the U.S.-Israeli campaign—while also claiming the U.S. does not need help—he is still urging partners to contribute naval forces to clear mines and protect tankers in the Strait of Hormuz, which has been largely disrupted during the conflict.
The visit, originally intended to reinforce long-standing U.S.-Japan ties, has become more complicated. While Takaichi has advocated for a stronger military posture at home, public opposition to the Iran war has so far prevented Japan from committing to operations in the Gulf.
Meanwhile, other U.S. allies, including Germany, Italy, and Spain, have declined to join any mission in the region, frustrating Trump. Takaichi has stated that Japan has not received a formal request but is reviewing what actions might be possible within constitutional limits.
Analysts note the meeting could prove challenging for Takaichi, who had hoped to influence Trump’s approach to Asia policy—particularly regarding China—but may instead have to respond to immediate demands related to the Middle East.
Japan is also preparing for potential U.S. requests to help produce or co-develop missiles to replenish American stockpiles depleted by conflicts in Iran and Ukraine. At the same time, Tokyo’s diplomatic ties with Iran could offer a channel for mediation, though past efforts have failed.
In addition, Takaichi is expected to express Japan’s intention to join the “Golden Dome” missile defense initiative and announce new investments in the U.S., potentially including tens of billions of dollars in sectors such as energy and critical minerals, building on earlier commitments tied to easing trade tensions.
Oil prices climb after Iran launches attacks on energy infrastructure across the Middle East.
Oil prices climbed on Thursday, with Brent crude surging by as much as $5 per barrel after Iran launched attacks on energy infrastructure across the Middle East in response to a strike on the South Pars gas field—marking a significant escalation in its conflict with the United States and Israel. By 0400 GMT, Brent futures had gained $4.66, or 4.3%, to $112.04 a barrel, after earlier peaking at $112.86. Meanwhile, U.S. West Texas Intermediate (WTI) rose 96 cents, or 1%, to $97.28, having previously jumped more than $3. Brent had already advanced 3.8% on Wednesday, while WTI ended nearly unchanged.
WTI has been trading at its widest discount to Brent in over a decade, driven by releases from U.S. strategic reserves and elevated shipping costs, while renewed strikes on Middle Eastern energy assets have lent additional support to Brent. Analysts noted that the intensifying conflict—targeted attacks on oil infrastructure and the loss of Iranian leadership—could lead to prolonged supply disruptions. They also pointed to the U.S. Federal Reserve’s decision to hold interest rates steady, accompanied by a hawkish outlook, as another factor heightening market concerns amid wartime conditions.
Further escalating tensions, QatarEnergy reported significant damage to its Ras Laffan LNG hub following Iranian missile strikes, while Saudi Arabia said it intercepted ballistic missiles and a drone targeting its gas facilities. Iran had issued evacuation warnings ahead of strikes on oil sites in Saudi Arabia, the UAE, and Qatar, retaliating for earlier attacks on its own facilities in South Pars and Asaluyeh.
South Pars, part of the world’s largest natural gas field shared between Iran and Qatar, was hit in an attack attributed to Israel, though U.S. and Qatari involvement was denied by President Donald Trump. He warned that the U.S. would respond if Iran targeted Qatar and said Israel would refrain from further strikes unless provoked.
Market analysts expect oil prices to remain elevated as tensions show no signs of easing and the Strait of Hormuz remains at risk of disruption. Reports also suggest the U.S. is considering deploying additional troops to the region, with options including securing tanker routes through the Strait—potentially involving both naval and air forces, and possibly ground troops if necessary.
When geopolitical tensions tied to oil intensify, most investors focus on outright oil prices. While those prices matter, fewer pay attention to the spread between Brent and WTI—an equally revealing signal. West Texas Intermediate (WTI), priced in Cushing, Oklahoma, serves as the U.S. benchmark and mainly reflects North American supply-demand dynamics.
Brent, by contrast, is the global benchmark derived from North Sea crude and closely mirrors international supply-demand conditions—especially seaborne oil flows through key routes like the Persian Gulf and the Strait of Hormuz. Under normal circumstances, Brent trades at a premium of about $2–$5 over WTI.
Sharp changes in this premium carry important market signals. In the context of the Iran conflict, the Brent–WTI spread offers one of the clearest real-time indicators of how producers, consumers, and traders are interpreting the situation.
A widening spread suggests markets are pricing in a global supply disruption, while a stable or narrowing gap—even with high spot prices—implies expectations that any disruption will be limited and temporary.
Recently, the spread has been highly volatile. It currently stands at around $7, pointing to concerns that the conflict could continue to strain global supply. However, frequent swings in the spread show how quickly sentiment is shifting with each new development.
S&P 500 Trails Most Sectors
Last week, the S&P 500 slipped by less than 0.5%, but it has fallen just over 3% from its Tuesday peak and now sits roughly 5% below recent highs. As illustrated in the charts, most sectors are outperforming the broader market based on both absolute and relative measures. The blue circle in the first chart shows that many sectors are positioned in the top-left quadrant—suggesting they are somewhat overbought relative to the S&P 500, yet slightly oversold on a standalone technical basis.
The second chart compares each sector’s performance versus the S&P 500 over the past five days and the prior 20-day period. Transportation stands out as a clear laggard. The third chart, which breaks down the sector’s top ten holdings, shows that oil-sensitive industries—such as trucking, freight, and airlines—have been hit the hardest. These businesses are also closely tied to overall economic activity.
As a result, elevated oil prices combined with rising concerns about economic slowdown are weighing heavily on transportation stocks. If the conflict drags on, the sector is likely to continue underperforming. Even if valuations become deeply oversold, they may stay depressed until there are clearer signs of stability or resolution.
Oil prices declined during Wednesday’s Asian session, pulling back from recent gains after Iraq and the Kurdistan Regional Government agreed to restart crude exports via Turkey’s Ceyhan terminal.
The agreement helped ease some concerns over supply disruptions stemming from the U.S.-Israel conflict with Iran. However, Brent crude remained above $100 per barrel, as the war entered its third week with little indication of de-escalation.
Markets also stayed cautious ahead of the Federal Reserve’s policy decision later in the day, amid worries that persistent inflation—fueled in part by higher oil prices linked to the Iran conflict—could prompt a more hawkish stance.
By 00:18 ET (04:18 GMT), Brent futures had dropped 2.3% to $101.05 per barrel, while West Texas Intermediate (WTI) crude fell 3.3% to $93.03 per barrel.
WTI faced additional pressure after data from the American Petroleum Institute showed U.S. crude inventories rose by 6.6 million barrels last week, defying expectations of a 0.6 million barrel draw. This data often signals a similar trend in official government figures, due later Wednesday.
On Tuesday, Iraq and Kurdish authorities finalized a deal to resume oil shipments to Turkey’s Ceyhan hub starting Wednesday. The move comes as major oil producers seek alternative export routes beyond the Strait of Hormuz, especially after Iran effectively blocked the critical passage earlier this month.
Iraq had reportedly aimed to export at least 100,000 barrels per day through Ceyhan, after shutting in around 70% of its production due to the conflict. Still, the volumes from Ceyhan are expected to cover only a small portion of the supply gap caused by disruptions in Hormuz.
Oil prices also eased after reports that the United Arab Emirates may support a U.S.-led initiative to secure shipping through the Strait of Hormuz. Iran had largely halted traffic through the strait—which handles roughly 20% of global oil supply—in retaliation for U.S. and Israeli strikes.
The UAE could become the first country to back Washington’s efforts, though most allies have so far declined to participate. Meanwhile, tensions remain high, with Iran escalating attacks on vessels near Hormuz following strikes on a key export facility. Reports also indicated that Iranian security chief Ali Larijani was killed in an Israeli strike, raising the risk of further retaliation.
Despite the pullback, oil prices remain supported by ongoing supply concerns. Brent has surged more than 40% since the conflict began in late February. Analysts at OCBC expect crude prices to stay above $100 per barrel through at least mid-2026, citing the lack of clear prospects for easing tensions.
Oil prices to remain above $100/bbl
Oil prices are expected to stay above $100 per barrel in the near term, as the U.S.-Iran conflict shows little indication of easing, according to analysts at OCBC.
The bank noted that with the conflict now in its third week and no meaningful diplomatic progress, crude flows through the Strait of Hormuz remain heavily restricted, keeping global supply tight.
OCBC has revised its outlook, projecting Brent crude to hover around $100 per barrel until mid-2026—well above its earlier estimate of roughly $70—before gradually declining toward $70 by early 2027 as disruptions ease.
Analysts warned that prolonged shipping disruptions are forcing Gulf producers to cut output, increasing the likelihood that short-term supply issues could turn into more sustained losses.
Tanker activity in the Strait of Hormuz has dropped sharply due to security concerns, effectively disrupting a crucial route responsible for about 20% of global oil consumption.
Although some shipments have cautiously resumed following Iranian inspections and potential stockpile releases from the International Energy Agency, overall volumes remain significantly below normal.
OCBC added that mitigation efforts—such as rerouting through alternative pipelines, tapping strategic reserves, and ongoing Iranian exports—could replace up to 10 million barrels per day. However, this would still leave a notable supply shortfall if disruptions persist.
The bank concluded that oil markets are nearing a “moderately severe” supply shock scenario, with risks tilted toward further price increases if geopolitical tensions continue.
Oil jumps more than 2% as markets assess supply threats from the Iran conflict.
Oil prices rebounded over 2% early Tuesday, recovering part of the previous session’s losses as supply concerns intensified amid major disruptions in the Strait of Hormuz.
Brent crude climbed to around $102.69 a barrel, while WTI rose to about $95.92. The gains follow a sharp selloff in the prior session, when prices dropped after some tankers managed to pass through the key shipping route.
The Strait of Hormuz—responsible for roughly 20% of global oil and LNG trade—has been largely disrupted by the ongoing US-Israel conflict with Iran, now in its third week, heightening fears of supply shortages, rising energy costs, and persistent inflation.
Tensions remain elevated as several US allies declined calls to deploy naval escorts for tankers, while risks of further attacks on shipping continue to threaten stability in the region. Iran has also sought the release of seized Indian tankers as part of efforts to secure safe passage through the Gulf.
The disruption has already forced the UAE to cut oil output by more than half, tightening global supply. In response to rising energy costs, the International Energy Agency is considering additional releases from strategic reserves beyond the 400 million barrels already planned.
Meanwhile, major banks have raised their oil price forecasts, reflecting the risk of prolonged supply disruptions. Scenarios range from a quick resolution that pushes prices back toward $70 to an extended conflict that could drive Brent toward $85 or higher.
Security sources report that drones and rockets were launched at the US embassy in Baghdad.
Several rockets and at least five drones targeted the US embassy in Baghdad early Tuesday, in what Iraqi security sources described as the most severe attack since the US–Israel conflict with Iran began.
Witnesses saw multiple drones heading toward the compound, with air defenses intercepting some, while at least one hit inside the embassy, sparking fire and smoke. Blasts were also reported across the city.
The strike reflects escalating retaliation by Iran-backed militias against US interests in Iraq following the war that started on February 28.
In response, Iraqi forces have increased security across Baghdad, shutting down the fortified Green Zone that houses key government buildings and diplomatic missions.
The US Dollar Index holds onto Monday’s pullback around the 100.00 mark as attention turns to the Fed’s policy decision.
Iran has permitted multiple countries to move their energy tankers through the Strait of Hormuz.
The Fed is widely anticipated to leave interest rates unchanged on Wednesday.
The US Dollar (USD) is holding onto Monday’s corrective move, which was triggered by a sharp pullback in oil prices that helped ease concerns about unanchored consumer inflation.
At the time of writing, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is edging slightly higher near 99.90.
The index retreated notably from Friday’s more-than-nine-month high of 100.54 as oil prices dropped after Iran permitted several countries to transport oil and Liquefied Petroleum Gas (LPG) shipments through the Strait of Hormuz, potentially reducing worries over energy supply disruptions.
In recent weeks, the USD has rallied strongly, supported by its safe-haven appeal amid escalating tensions involving Iran, the United States, and Israel. Additionally, elevated oil prices have dampened expectations for near-term interest rate cuts by the Federal Reserve (Fed).
Data from the CME FedWatch tool suggests that markets are largely convinced the Fed will keep rates unchanged until at least the September meeting, with the probability of a rate cut at that time standing at around 50%.
Looking ahead, investors will closely watch Wednesday’s Fed policy decision for further guidance. Attention will also be on the FOMC’s Economic Projections report, which will provide updated forecasts for interest rates, inflation, and economic growth.
WTI
WTI prices advance to around $94.20 during early Tuesday trading in Asia.
Rising geopolitical tensions in the Middle East continue to support crude prices.
The IEA is considering releasing additional oil reserves to mitigate the economic fallout from the US–Israel conflict with Iran.
West Texas Intermediate (WTI), the US crude benchmark, is hovering near $94.20 during early Tuesday trading in Asia, supported by ongoing tensions surrounding Iran, with no clear signs of de-escalation. Market participants are also awaiting the American Petroleum Institute (API) report due later in the day.
On Tuesday, the Israeli military reported detecting missiles launched from Iran toward Israeli territory, urging residents in impacted areas to seek shelter immediately. Meanwhile, the United Arab Emirates (UAE) announced a temporary full closure of its airspace as a precautionary step, with its defense ministry confirming responses to incoming missile and drone threats from Iran.
Fears of retaliatory Iranian strikes targeting ships, infrastructure, and key transit ports for oil shipments have raised concerns that the conflict could evolve into a prolonged regional war. Such risks may continue to provide near-term support for WTI prices.
However, on the supply side, the International Energy Agency (IEA) is considering releasing additional oil reserves into the global market to ease upward pressure on prices. The agency indicated a potential release of up to 400 million barrels, which, if coordinated among member countries, could temporarily boost supply and help limit sharp price spikes.
Silver (XAG/USD)
Silver declines as traders adjust positions ahead of Wednesday’s Federal Reserve policy decision.
Higher oil prices, driven by escalating tensions in the Middle East, are fueling inflation concerns and dampening expectations for near-term Fed rate cuts.
At the same time, geopolitical risks involving the United States, Iran, and Israel are helping to cap deeper losses by maintaining demand for safe-haven assets like silver.
Silver (XAG/USD) is trading near $80.50 on Tuesday, down about 0.60% on the day. The metal remains under pressure as fading expectations for near-term US rate cuts—amid rising inflation concerns tied to Middle East tensions—continue to weigh on sentiment.
Markets broadly expect the Federal Reserve to keep its benchmark rate unchanged within the 3.50%–3.75% range at Wednesday’s meeting, according to the CME FedWatch tool. If confirmed, this would mark a second straight pause following the prior easing cycle. Prolonged higher rates tend to pressure non-yielding assets like Silver, as they raise the opportunity cost of holding them.
Escalating geopolitical tensions in the Middle East have driven Oil prices higher, fueling fears of persistent inflation. Rising gasoline costs in the US are adding strain on households and may keep inflation expectations elevated, reinforcing the case for the Fed to maintain restrictive policy for longer.
Geopolitical developments continue to influence the precious metals market. Recent US strikes on Iran’s key export hub on Kharg Island have intensified concerns over global energy supply disruptions. While Washington has indicated the conflict could be resolved within weeks and is exploring an international effort to secure shipping routes through the Strait of Hormuz, uncertainty remains high.
This fragile geopolitical backdrop may help limit further downside in Silver. As a safe-haven asset, it tends to attract demand during periods of heightened risk, which could cushion losses even as higher interest rate expectations dampen overall investor appetite.
Sources: Ghiles Guezout, Lallalit Srijandorn and Sagar Dua
Oil prices increased on Monday as the ongoing conflict involving the United States, Israel, and Iran continued to disrupt oil production and transportation across the Middle East, despite a call from Donald Trump for international cooperation to protect the strategic Strait of Hormuz.
Brent crude futures climbed by $2.30, or 2.2%, reaching $105.44 per barrel at 0903 GMT, while U.S. West Texas Intermediate crude rose $1.29, or 1.3%, to $100 per barrel.
Both benchmarks have jumped more than 40% this month, reaching their highest levels since 2022. The surge followed U.S.–Israeli strikes on Iran, which led Tehran to halt shipments through the Strait of Hormuz—an essential route for global energy trade—disrupting roughly one-fifth of the world’s oil and LNG supplies.
On Monday, oil-loading activities were suspended at the UAE’s Fujairah port after a drone strike triggered a fire in the emirate’s petroleum industrial area, according to two sources who spoke to Reuters.
Fujairah, located outside the Strait of Hormuz, serves as an export hub for around 1 million barrels per day of the UAE’s flagship Murban crude oil, equivalent to roughly 1% of global oil demand.
The International Energy Agency warned on Thursday that the conflict in the Middle East is causing the most severe oil supply disruption on record, as major producers including Saudi Arabia, Iraq, and the United Arab Emirates have reduced output since the war began.
According to PVM analyst Tamas Varga, investors appear to understand that if just two weeks of disruption in the Strait of Hormuz have already caused significant damage to production, exports, and refining, a prolonged conflict could have far more serious consequences, particularly as global inventories continue to decline.
Analysts from ING said on Monday that recent U.S. strikes on Kharg Island over the weekend have heightened concerns about oil supply, as the majority of Iran’s crude exports are shipped through the island.
Although the attacks appeared to focus on military installations rather than energy infrastructure, ING noted that they still threaten supply stability. This is because Iranian crude is currently among the few oil flows still passing through the vital Strait of Hormuz.
During the weekend, Donald Trump warned that additional strikes could target Kharg Island—an export hub responsible for roughly 90% of Iran’s oil shipments—after U.S. forces hit military facilities there, prompting retaliatory actions from Tehran.
On Sunday, Trump called on other countries to assist in safeguarding this critical energy corridor and said that Washington was holding discussions with several nations about jointly monitoring and securing the strait.
Trump also stated that the United States remained in communication with Iran, though he expressed skepticism that Tehran was ready to engage in meaningful negotiations to bring the conflict to an end.
Meanwhile, the International Energy Agency announced on Sunday that more than 400 million barrels of strategic oil reserves would soon be released into the market—a record intervention intended to stabilize prices amid disruptions caused by the Middle East conflict.
According to the agency, reserves from countries in Asia and Oceania will be made available immediately, while supplies from Europe and the Americas are expected to enter the market by the end of March.
SEB analyst Meyersson said that as the conflict moves into its third week, the absence of a clear resolution is increasing global market anxiety about the possibility of an uncontrolled escalation.
However, U.S. Energy Secretary Chris Wright said on Sunday that he expected the war to end within the next few weeks, which could allow oil supplies to recover and energy prices to decline.
WTI declined after Australia’s Energy Minister Chris Bowen announced the release of 762 million liters of fuel from the country’s reserves. However, oil prices could climb again as the Strait of Hormuz remains closed amid intensifying tensions between the U.S., Israel, and Iran. Iran’s new supreme leader Mojtaba Khamenei stated that keeping the strait shut should continue to serve as a “tool to pressure the enemy.”
West Texas Intermediate (WTI) crude traded slightly lower during Asian trading hours on Friday, hovering around $95.20 per barrel after surging more than 9% in the previous session. Prices eased after Australia’s Energy Minister Chris Bowen announced that the country would release up to 762 million liters of fuel from strategic reserves and relax fuel stockholding rules to ease supply disruptions linked to the conflict with Iran.
The Australian government also plans to cut minimum fuel reserve requirements by as much as 20% in an effort to stabilize domestic supply. Nevertheless, oil prices could continue to climb as the Strait of Hormuz remains effectively closed amid escalating tensions between the United States, Israel, and Iran.
Since the war began, U.S. crude prices have jumped more than 40%. The International Energy Agency (IEA) warned that the U.S.–Israeli conflict with Iran could be triggering the largest supply disruption in the history of the global oil market.
Reports indicate that officials from the U.S. Department of Defense and the National Security Council underestimated Iran’s willingness to shut down the Strait of Hormuz in response to U.S. military strikes while planning the operation. The waterway carries around one-fifth of global oil consumption, making it one of the most strategically vital shipping routes in the world. Any interruption to tanker traffic there can rapidly impact global energy markets.
In his first public remarks since assuming power, Iran’s new supreme leader Mojtaba Khamenei said the closure of the Strait of Hormuz should remain a “tool to pressure the enemy.” He also warned that all U.S. military bases in the region should be shut down immediately or risk potential attacks.
Oil prices surged in Asian trading on Thursday, climbing back above the key $100 per barrel mark as concerns mounted over energy supply disruptions tied to the ongoing conflict between the United States, Israel, and Iran.
Brent crude futures jumped more than 9% to $100.25 per barrel by 22:52 ET (02:52 GMT), while West Texas Intermediate (WTI) rose 8.8% to $93.67 per barrel.
Reports indicated that two international oil tankers were attacked in the northern Persian Gulf near Iraq and Kuwait. Videos circulating online showed the vessels on fire, with Iraqi media blaming the strike on Iran.
Separately, Bloomberg reported that Oman evacuated all ships from the major oil export terminal at Mina Al Fahal as a precaution following a series of attacks on vessels in the region.
These incidents suggest the conflict is spreading beyond the Strait of Hormuz, as the war entered its thirteenth straight day on Thursday. Attacks on tankers and port shutdowns intensified fears of supply disruptions, particularly after Iran warned that no crude oil would pass through the strategic waterway, which carries roughly 20% of global oil shipments. The country was reported to have already blocked traffic through the route earlier this week.
However, oil prices stayed below their weekly highs as several countries moved to counter potential supply shortages. Reports suggested the International Energy Agency was preparing to release a record 400 million barrels from strategic reserves. Meanwhile, Donald Trump said the United States would release 172 million barrels from its Strategic Petroleum Reserve to ease energy market pressures caused by the conflict.
Despite repeated claims from U.S. officials that the war could soon end, the fighting has shown little sign of easing. Oil prices had earlier surged to nearly $120 per barrel earlier this week.
Oil prices rebounded on Wednesday as investors questioned whether a planned large-scale release of strategic reserves by the International Energy Agency would be enough to offset potential supply disruptions caused by the U.S.–Israeli conflict with Iran.
Brent crude futures rose 59 cents, or 0.7%, to $88.39 a barrel by 07:27 GMT, while West Texas Intermediate crude oil gained 98 cents, or 1.2%, to $84.43 per barrel.
Both benchmarks had extended losses earlier in Asian trading after plunging more than 11% on Tuesday, despite U.S. crude initially jumping 5% at the market open.
According to a report by The Wall Street Journal, the proposed IEA release would surpass the 182 million barrels collectively released by member countries in 2022 following the Russian invasion of Ukraine.
Analysts at Goldman Sachs said such a stockpile release could offset roughly 12 days of an estimated 15.4 million barrels-per-day disruption in Gulf exports.
Meanwhile, the conflict continued to escalate. The U.S. and Israel launched what both the Pentagon and Iranian sources described as the most intense airstrikes of the war on Tuesday. The United States Central Command also said the U.S. military had destroyed 16 Iranian mine-laying vessels near the Strait of Hormuz, after Donald Trump warned that any mines placed in the waterway must be removed immediately.
Some analysts remained skeptical that the reserve release would significantly ease market tensions. Suvro Sarkar, energy sector team lead at DBS Bank, said such moves were unlikely to solve the crisis, adding that oil prices would largely depend on how long the conflict with Iran continues. Strategic signals, including potential reserve releases, may help temper near-term price spikes, he added.
Leaders of the Group of Seven have also convened to discuss a coordinated emergency stockpile release. Emmanuel Macron is set to host a virtual meeting with other G7 leaders to assess the Middle East conflict’s impact on energy markets and possible responses.
Trump has repeatedly stated that the U.S. is prepared to escort oil tankers through the Strait of Hormuz if necessary. However, sources told Reuters that the United States Navy has so far declined shipping industry requests for escorts, citing high security risks.
Supply concerns remain
Energy infrastructure disruptions have also added to supply worries. Abu Dhabi National Oil Company reportedly shut down its Ruwais refinery after a drone strike caused a fire at the complex.
At the same time, Saudi Arabia, the world’s largest oil exporter, is attempting to increase shipments via the Red Sea. However, current export levels remain far below what would be needed to fully offset the decline in flows through the Strait of Hormuz. The kingdom is relying on the Red Sea port of Yanbu to boost shipments as neighbors such as Iraq, Kuwait, and the UAE have already reduced production.
Energy consultancy Wood Mackenzie estimates the war is currently cutting Gulf oil and refined product supplies by about 15 million barrels per day, a disruption that could potentially push crude prices as high as $150 per barrel.
Analysts at Morgan Stanley noted that even a quick resolution to the conflict could still leave energy markets facing several weeks of disruption.
Meanwhile, signs of strong demand also supported prices. Data from the American Petroleum Institute indicated that U.S. crude, gasoline, and distillate inventories all declined last week.
Oil prices surged about 25% on Monday, reaching their highest level since mid-2022. Brent crude was on course for its largest single-day increase on record, while gold declined by around 2%. The sharp moves came as the escalating war involving Iran tightened global energy supplies, strengthened the U.S. dollar, and reduced expectations that interest rates will be cut soon.
Agricultural markets also moved higher, particularly edible oils, which tend to follow crude oil prices because vegetable oils are widely used in biofuel production. Aluminium prices edged higher due to supply concerns, although other industrial metals struggled under pressure from the stronger U.S. dollar.
According to IG market analyst Tony Sycamore, the intense market reaction reflects the lack of any clear path to de-escalation in the Middle East conflict. He noted that the situation has turned into a high-stakes standoff where neither side appears ready to back down, increasing the risk of lasting economic damage. Meanwhile, Iran announced that Mojtaba Khamenei will succeed his father Ali Khamenei as Supreme Leader, signaling that hardline leadership remains firmly in control in Tehran during the ongoing conflict with the United States and Israel.
Oil rally pushes agricultural markets higher
Brent crude appeared set to record its largest single-day gain both in percentage and absolute terms. The surge was driven by the widening U.S.–Israeli conflict with Iran, which prompted some major Middle Eastern producers to reduce supply and raised fears of prolonged disruptions to shipping through the Strait of Hormuz, a critical global oil chokepoint.
During the session, Brent crude futures climbed to about $119.50 per barrel, while U.S. West Texas Intermediate (WTI) reached roughly $119.48 per barrel.
Analysts at ING Group said in a note that conditions appear to be worsening further. They added that upstream oil production has begun to shut down as producers face limited storage capacity. As a result, Iraq, Kuwait, and the UAE have started cutting their oil output. In agricultural markets, Malaysian palm oil prices jumped about 9%, while Chicago soybean oil climbed to its highest level since late 2022, supported by the strong rally in crude oil. Wheat prices reached their highest point since June 2024, and corn rose to a 10-month high.
Meanwhile, gold dropped more than 2% as a stronger U.S. dollar put pressure on dollar-denominated bullion. Rising energy costs also increased inflation concerns and further reduced expectations that interest rates will be lowered in the near term.
The U.S. dollar remained close to a three-month high, which made gold more expensive for buyers using other currencies. Concerns that higher oil prices could drive inflation and delay rate cuts appear to have pushed U.S. bond yields and the dollar higher, offsetting gold’s usual safe-haven demand and sending prices lower.
Aluminium surges on supply concerns
Aluminium prices surged to their highest level in four years as supply worries intensified amid the Middle East conflict. Benchmark three-month aluminium contracts on the London Metal Exchange rose to about $3,544 per ton, the highest level since March 2022.
Two major Gulf producers—Qatalum and Aluminium Bahrain—have already declared force majeure on shipments as tensions in the region escalate. However, other base metals faced downward pressure due to the strengthening U.S. dollar.
Silver faced a difficult week as the U.S. dollar strengthened for much of the period, though it’s important to remember that its recent collapse wiped out many retail trading accounts.
That said, this is a market worth monitoring closely because the $80 level represents an important support area and sits near the center of the broader consolidation range.
If the price breaks below this week’s candlestick, it could open the door for silver to decline toward the $70 level, where I also expect support to emerge.
Overall, the market has been quite volatile and choppy, and that pattern is likely to persist. Because of this, careful position sizing will be essential.
S&P 500
The S&P market declined quite sharply over the week, testing the 5,000 level. This level is a major round number with strong psychological importance, so it’s an area many investors are watching closely.
If the market breaks below 5,000, it could pave the way for a drop toward 4,800, with the possibility of quickly moving further down to around 4,600.
From a longer-term perspective, the 5,000 level may continue to act as a price magnet for the market.
If that remains the case, we could see extended sideways movement around this zone, although my broader outlook still leans bullish over the long run.
USD/CAD
The US dollar first strengthened against the Canadian dollar, rising to test the 1.3750 level, but then reversed and began showing signs of weakness. Meanwhile, the 1.35 level below stands as an important support area that many market participants are closely monitoring.
It is also worth noting that the Canadian dollar has been gaining some strength on the back of rising oil prices. Whether that trend will continue is uncertain, but if oil fails to maintain its momentum, a reversal could follow.
For now, the market remains within the same consolidation range that it has revisited repeatedly.
USD/MXN
The US dollar surged sharply against the Mexican peso during the week, but in reality a pullback had been due. The key question now is whether the 18-peso level will act as strong enough resistance to reverse the move.
If it does, it could present a solid opportunity to take short positions. However, if the market manages a daily close above the 18-peso level, it may signal that the recent trend is coming to an end.
All things considered, this is a market where traders may look for signs of exhaustion to sell into, as the interest rate differential still generally favors Mexico.
Bitcoin
The Bitcoin market has been quite volatile during the week, but it did manage to break above the $72,000 level. This is notable given the overwhelmingly negative headlines around the world at the moment, and it’s a market I’ll be monitoring very closely.
If the market can close above the weekly high and continue moving higher, Bitcoin could begin to rally strongly. There may still be debate about what Bitcoin truly represents, but one thing seems clear—it appears to be heavily oversold.
The key question now is whether buyers will step back in. On the other hand, if the price drops below the $60,000 level, it could trigger a sharp and widespread sell-off.
Nasdaq 100
The Nasdaq 100 has been volatile but has continued to show resilience. This is a pattern that appears repeatedly in the US stock market, even when there have been plenty of reasons for it to break down. In itself, that persistence likely says a lot about the underlying strength of the market.
What I think it tells you is that given enough time, the US stock market, and in this case the Nasdaq 100, will find buyers on any pullback and selling just does not seem to be working out.
EUR/USD
The euro weakened significantly during the week. Much of this appears to be driven by expectations that energy costs in the European Union will rise sharply, which could heavily influence the options available to the European Central Bank.
Keep a close eye on the 1.15 level. If the market breaks below that point, the euro could decline sharply.
For now, the market remains within the same consolidation range it has been trading in for some time. I do not expect significant movement at the moment, but the 1.15 level will be important to watch.
USD/JPY
The US dollar continues to signal the possibility of a major breakout against the Japanese yen, although it has not achieved it yet. The ¥158 level marks the start of a strong resistance zone that extends up to the ¥160 level.
If the market manages to break above that area, it is likely to move significantly higher. In the short term, pullbacks could present buying opportunities as traders look to pick up the dollar at lower prices.
Over the longer term, I expect an eventual breakout to the upside. However, the current situation makes it challenging to short the market, while buying directly at this resistance zone is also difficult. It may be best to wait for better value and take advantage of opportunities when they appear.
U.S. crude oil futures surged on Friday as the widening U.S.–Israeli conflict with Iran disrupted global oil supply expectations.
Brent crude settled at $92.69 per barrel, rising $7.28 or 8.5%, while West Texas Intermediate (WTI) climbed $9.89, or 12.2%, to close at $90.90 per barrel.
On a weekly basis, WTI jumped 35.6% and Brent gained about 27%, marking their strongest weekly advances since the early stages of the COVID-19 pandemic in spring 2020.
For the second straight day, U.S. crude futures outperformed Brent as refiners around the world rushed to secure alternative oil supplies to offset potential disruptions from the Middle East.
According to UBS analyst Giovanni Staunovo, refiners and trading firms are actively seeking substitute barrels, with the United States — the world’s largest oil producer — emerging as a key supplier.
Janiv Shah, vice president of oil analytics at Rystad Energy, noted that several factors contributed to the wider gains in WTI compared with Brent. Strong refinery activity supported by attractive refining margins, along with favorable arbitrage opportunities for shipments to Europe, helped drive demand for U.S. crude.
Could oil exceed $100?
Qatar’s energy minister warned in an interview with the Financial Times that Gulf energy producers might halt exports within weeks if the conflict escalates further. Such a move, he suggested, could push oil prices as high as $150 per barrel.
John Kilduff, partner at Again Capital, said the situation is increasingly alarming. “The worst-case scenario is unfolding right in front of us,” Kilduff said, adding that forecasts of oil reaching $100 per barrel now appear increasingly realistic.
Oil prices began their sharp rally after the United States and Israel carried out strikes on Iran last Saturday, which prompted Iran to halt tanker traffic through the Strait of Hormuz.
Around 20% of the world’s daily oil supply normally passes through this key shipping route. With the strait effectively closed for seven days, roughly 140 million barrels of crude — equivalent to about 1.4 days of global demand — have been prevented from reaching international markets.
The conflict has expanded across major energy-producing regions in the Middle East, disrupting production and forcing several refineries and liquefied natural gas facilities to shut down.
UBS analyst Giovanni Staunovo said oil prices are likely to continue rising for as long as the strait remains closed. He noted that markets previously believed U.S. President Donald Trump might eventually scale back the conflict to avoid higher oil prices, but the longer the situation persists, the greater the perceived supply risk becomes.
In an interview with Reuters on Thursday, Trump said he was not worried about rising gasoline prices in the United States linked to the conflict, commenting that “if they rise, they rise.”
Earlier on Friday, oil prices briefly dropped by more than 1% after speculation that the U.S. Treasury Department might take steps to counter the surge in energy costs.
On Thursday, the Treasury issued waivers allowing companies to purchase sanctioned Russian oil. The first approvals were granted to Indian refiners, which have since bought millions of barrels of Russian crude.
Oil prices climbed more than 3% on Thursday, extending their rally as the escalating conflict involving the United States, Israel, and Iran disrupted energy supplies and shipping routes. The tensions prompted some major producers to reduce output while others took steps to secure supply. Brent crude rose $2.64, or 3.2%, to $84.04 per barrel by 1425 GMT, marking a fifth straight session of gains, while U.S. West Texas Intermediate (WTI) increased $3.35, or 4.5%, to $78.01.
The premium of prompt Brent futures over the six-month contract approached its widest level since July 2022, signaling tighter global supply. Renewed tanker attacks in the Gulf and China’s move to curb fuel exports also supported prices, according to UBS analyst Giovanni Staunovo, who noted that refined fuel markets are showing stress due to reduced Middle East exports. Some refineries in the Middle East, China, and India have shut crude units amid the conflict, while European diesel futures surged to their highest level since October 2022 at $1,130 per tonne.
Attacks on oil tankers continued in the Gulf, including damage to the Bahamas-flagged tanker Sonangol Namibe near Iraq’s Khor al Zubair port. Around 300 tankers remained stranded in the Strait of Hormuz as traffic through the vital chokepoint nearly halted. Natural gas prices also rose after Russian President Vladimir Putin warned that Russia could stop its remaining gas flows to Europe, while Qatar declared force majeure on LNG shipments. European gas prices at the Dutch TTF hub for April delivery climbed nearly 3% to around 50 euros per MWh, bringing gains since Friday to nearly 60%.
Meanwhile, Iran launched missiles at Israel as the conflict entered its sixth day, following a U.S. submarine strike that sank an Iranian warship near Sri Lanka. Analysts at J.P. Morgan warned that oil supplies from Iraq and Kuwait could begin shutting down if the Strait of Hormuz remains closed, potentially removing up to 3.3 million barrels per day from the market. Iraq has already reduced production by nearly 1.5 million barrels per day due to limited storage and export routes, while Qatar said it may take at least a month to restore normal LNG export levels.
Oil markets are holding near the top of their recent trading band as participants factor in an added layer of logistical risk to global energy supply chains.
Crude has rebounded toward the 76–77 zone after strong buying interest emerged around 72, where support formed amid renewed tensions surrounding the Strait of Hormuz. Concerns over tanker traffic and potential shipping bottlenecks prompted buyers to step in aggressively at that level.
Although the market has not yet entered a full volatility breakout, recent price action indicates that crude is beginning to price in a geopolitical premium—driven less by outright production losses and more by uncertainty surrounding transportation routes.
At this stage, oil appears to be recalibrating to elevated logistics risk rather than responding to an immediate supply shock.
Hormuz Strains Redirect Market Focus to Supply Chain Risk
Recent events surrounding the Strait of Hormuz have underscored that energy security depends not only on production levels, but also on the reliability of transport routes.
Approximately one-fifth of the world’s traded crude moves through this narrow passage linking the Persian Gulf with the Indian Ocean. Even limited interruptions to traffic through the corridor can quickly spill over into freight markets, insurance costs, and tanker availability.
Signs of mounting congestion and heightened caution among tanker operators have already driven freight rates higher, while insurers are reassessing war-risk premiums for ships crossing the region.
Such bottlenecks may not immediately eliminate physical supply, but they can slow the circulation of oil through global networks. In commodity markets, logistical slowdowns frequently manifest as increased price volatility.
Physical Flows Matter as Much as Production
The current backdrop highlights a familiar theme in oil markets: disruptions to transportation networks can tighten supply perceptions even when overall output remains steady.
When tanker routes are constrained, ships may need to reroute or wait offshore, effectively extending supply chains and temporarily shrinking available shipping capacity. That dynamic can create pockets of tightness at key delivery hubs, even if global stockpiles appear sufficient on paper.
In recent trading sessions, this logistical dimension has become a more influential force in price formation. Market participants are increasingly monitoring tanker movements, port congestion, and freight costs as real-time signals of stress within the physical crude system.
Consequently, oil is now trading not just on traditional supply-demand fundamentals, but also on the durability and flexibility of the infrastructure responsible for moving those barrels worldwide.
Oil has staged a decisive rebound from the 72 region, marking a notable shift in short-term structure.
From a technical standpoint, the Renko pattern reflects a clear momentum transition following the recent pullback. The 72 area emerged as a strong demand zone, where buyers stepped in forcefully after a run of declining bricks signaled waning downside pressure. That reversal sparked a steady advance, lifting crude back toward the top of its near-term trading range.
Support has now rotated higher, clustering in the 75.0–74.7 band. This zone has functioned as a pivot throughout the latest consolidation phase and represents the first layer of defense should prices retrace.
Beneath current levels, the more meaningful structural support remains around 72.1, which formed the foundation of the latest corrective phase.
On the upside, the 76.3–76.8 range is shaping up as a key resistance corridor. Multiple rallies have stalled in that area, indicating that market participants are still weighing whether the prevailing geopolitical risk premium is strong enough to fuel a sustained breakout.
For now, the broader pattern appears to reflect orderly consolidation after a sharp rebound, rather than the early stages of a renewed bearish trend.
Momentum Signals Indicate a Mature Expansion Phase
Momentum metrics reinforce the view that crude is moving out of a compression environment and into a more developed directional cycle.
The ECRO profile remains elevated, hovering near the top of its historical range. This typically characterizes conditions where volatility has already expanded and the market is consolidating those gains, rather than initiating a fresh breakout. Meanwhile, stochastic momentum has rebounded toward its upper boundary after briefly easing during the recent pullback.
Together, these signals imply that upside pressure remains intact, though the market may need additional consolidation before launching its next impulsive move. In essence, the current hesitation near resistance appears to reflect constructive digestion of prior gains, not a sign of trend exhaustion.
Freight Markets Could Provide the Next Major Signal
Looking ahead, shipping conditions in the Persian Gulf are likely to remain a critical variable for oil markets.
If tanker congestion worsens or freight rates continue climbing, traders may begin assigning a higher logistical risk premium to crude. Transportation disruptions typically ripple through the system gradually, meaning their pricing impact often builds over time rather than materializing as a single abrupt shock.
On the other hand, if shipping activity stabilizes and geopolitical tensions ease, a portion of the recently embedded premium could unwind. In that case, crude would likely shift back to trading primarily on macroeconomic drivers such as global demand expectations, currency fluctuations, and inventory trends.
For now, however, freight dynamics remain a central component of the oil narrative.
Outlook
Crude is navigating a landscape shaped as much by transportation risk as by traditional supply fundamentals. The rebound from the 72 area reinforces the view that buyers are still active on pullbacks, while the consolidation around 76 indicates the market is assessing whether current geopolitical risks justify a sustained breakout.
As long as prices remain above the 75–74.7 support zone, the near-term technical structure stays constructive. A clear push above 76.8 would signal renewed upside momentum and could pave the way for a broader expansion phase. Conversely, a decisive break below 74.7 would likely shift crude back into a wider consolidation pattern.
At present, price action reflects a market recalibrating to elevated transportation risk rather than responding to a structural collapse in supply.
WTI crude surged over 6%, climbing back above the $75 level amid heightened market tension.
Oil prices have shot up as fears grow that the escalating US-Iran conflict could disrupt global supply chains.
Goldman Sachs suggests the market is currently pricing in roughly an $18 per barrel geopolitical risk premium on crude.
West Texas Intermediate (WTI) jumped more than 6% on Tuesday, pushing past the key $75 threshold as the intensifying US–Iran conflict stoked concerns over possible supply disruptions via the Strait of Hormuz.
At the time of writing, the US crude benchmark is hovering near $76.16 — its highest level since June 2025.
Roughly 20% of global oil shipments pass through the Strait of Hormuz, underscoring its status as a critical energy chokepoint. Senior figures from Iran’s Islamic Revolutionary Guard Corps (IRGC) reportedly announced the closure of the strait, warning that any vessel attempting to transit could be “set ablaze.”
Amid escalating security risks, many shipowners have suspended passage through the corridor, with several tankers waiting outside the waterway. In addition, Saudi Aramco has halted operations at its Ras Tanura refinery after a drone strike in the vicinity. The site has a processing capacity of approximately 550,000 barrels per day.
According to a Reuters report on Monday, Goldman Sachs estimates that oil prices currently include an $18 per barrel real-time geopolitical risk premium, based on a note issued Sunday. The bank added that the premium could ease to about $4 per barrel if only half of the Strait of Hormuz’s flows are disrupted for one month.
Heightened geopolitical tensions triggered a sharp 7–8% rally in WTI and Brent crude at the start of March. A confirmed technical breakout, along with a rising 200-day moving average, indicates the broader uptrend remains intact despite near-term resistance levels. Energy equities continue to outperform the wider market as volatility intensifies across commodities.
After Venezuela, attention has now shifted to Iran. Weekend strikes led by the U.S. and Israel on the oil-producing nation sent crude prices surging to open March. WTI climbed 7% to $72, while Brent advanced 8% to $79 per barrel.
Notably, the Brent–WTI spread widened beyond $7 — up from roughly $3 during last year’s more stable geopolitical environment — underscoring growing geopolitical risk.
Oil’s Rally Isn’t Exactly a Surprise
Crude’s advance didn’t begin overnight. WTI carved out a bottom in mid-December just below $55, marking a multi-year low as President Trump pushed for lower domestic energy prices. A decisive move above the 50-day moving average in January — followed by a breakout above the 200-day average weeks later — signaled that bulls were taking control. Now, $WTIC is trading at its strongest level since the U.S. struck key Iranian nuclear facilities in June 2025.
The pressing question now is: Where does oil head next?
Let the Charts Do the Talking
As always, it helps to swap the macro lens for a technical one. Earlier this year, crude broke out of a downtrend formation — a clear signal to consider gaining exposure, whether through an oil ETF like the United States Oil Fund or by overweighting energy stocks.
At the time, the mid-$50 range was emerging as a critical support zone. Even amid bearish rhetoric from the White House and persistent talk of a supply glut, WTI continued grinding higher.
Near-Term Selling Pressure?
Taking a broader view, crude may now be running into resistance following a powerful 30% surge in less than three months. The rolling front-month contract spiked into the mid-$70s on Sunday night before easing back toward the low $70s — establishing a fresh battleground for traders.
Adding to the tension, the CBOE Oil Volatility Index has jumped sharply, signaling that a decisive breakout — or breakdown — could unfold quickly. Technically, WTI has also tagged a descending resistance line drawn from the Q3 2023 peak, doing so after one of its strongest single-day advances in the past five years.
Also note the upward slope of the 200-day moving average — a sign that bulls remain in control of the broader trend. While the current advance lacks the explosive momentum seen five years ago, when Brent surged to $135, there are still constructive elements supporting the bullish case. With the 200-day average gradually climbing and seasonally favorable calendar trends ahead, oil bulls have several tailwinds working in their favor.
Muted March, Lively April–June?
StockCharts’ seasonality data shows that while March has delivered mixed results over the past 20 years, the second quarter has produced consistently strong returns. In fact, the April-to-June period stands out as the best-performing three-month stretch of the year.
On the chart below, a push through the low $70s would suggest the next upside target lies in the $77–$80 area, where prices peaked between Q3 2024 and last June. Beyond that, a move toward $92–$93 is not out of the question.
For Fibonacci watchers, the 38.2% retracement of the March 2022 high to the December 2025 low comes into focus slightly above $82. Meanwhile, the 61.8% retracement level sits just shy of the $100 mark.
XOM & XLE Flash Clear Bullish Signals
Another way to capture both relative strength and absolute momentum in the energy complex is through energy equities. My preferred name there is Exxon Mobil (NYSE: XOM). Back in December, I highlighted $155 as an achievable target based on developing chart formations. The stock reached that level swiftly, peaking near $157 before retracing to around $145. Ahead of the weekend’s geopolitical flare-up, a daily bull flag appeared to be resolving in favor of the bulls.
Although not flawless, the “Extended Hours” feature on StockCharts SharpCharts helps assess more detailed after-hours and pre-market price action. That broader view shows how a pattern of lower highs and higher lows paved the way for a breakout within a larger uptrend. On Monday, XOM gapped sharply from $152.50 to $160.
A fresh measured-move target of $188 is now in play, derived from the January–February advance projected from the $150 consolidation breakout. That said, a price gap remains just above $150, and it could be revisited if West Texas Intermediate stalls near the previously mentioned downtrend resistance.
More broadly, Energy has emerged as the clear leader among the 11 S&P 500 sectors, outperforming by a wide margin. The group was up 24.4% year-to-date through February.
The Energy Select Sector SPDR Fund surged 25% in the first two months of the year, marking its strongest consecutive two-month performance since October–November 2022, when it rebounded sharply off the bear market lows.
Like its largest holding, Exxon Mobil, the bulls seem firmly in control of the Energy Select Sector SPDR Fund. The monthly chart suggests that once the $50–$51 resistance zone was cleared, momentum accelerated decisively. A long-term objective in the low $90s appears achievable, measured by the magnitude of the 2014–2020 decline, the rebound to $50, and the early-2026 breakout to fresh highs.
Depending on how March plays out, XLE could be on track for its strongest quarterly gain ever.
The Bottom Line
Traders were fixated on futures screens at 6 p.m. ET Sunday, as Brent Crude surged 13% on the open and West Texas Intermediate briefly climbed toward $75. Early profit-taking tempered the initial spike, yet volatility across the energy complex remains elevated. While U.S. crude is running into near-term resistance, longer-term charts continue to show constructive strength in energy stocks.
Futures tied to the main U.S. stock benchmarks edged lower as investors focused on key earnings from the technology sector. Nvidia, a heavyweight in the U.S. equity market, delivered stronger-than-expected results, though investors are seeking clearer guidance on when its substantial cash flow will translate into greater shareholder returns. Salesforce shares declined after issuing a softer revenue outlook. Meanwhile, oil prices held steady ahead of crucial nuclear negotiations between U.S. and Iranian officials.
Futures Edge Lower
U.S. equity futures moved down Thursday as markets digested earnings from AI leader Nvidia.
As of 03:05 ET (08:05 GMT), Dow futures were down 122 points, or 0.3%, S&P 500 futures slipped 0.1%, and Nasdaq 100 futures also fell 0.1%. This followed gains across all major Wall Street indices in the previous session, when investors positioned ahead of Nvidia’s earnings release.
Sentiment had improved on renewed optimism surrounding artificial intelligence, marking another shift in what has been a volatile narrative around the emerging technology. The Nasdaq led prior gains as investors regained confidence that AI could eventually deliver broad economic benefits — contrasting with earlier concerns that new AI models might disrupt software firms and limit returns on heavy data center spending.
Remarks from Richmond Fed President Tom Barkin also supported equities, as he noted uncertainty over whether automation would significantly raise unemployment and suggested AI could instead improve labor market efficiency.
Nvidia Little Changed Despite Strong Results
Nvidia reported better-than-expected earnings for the January quarter and issued revenue guidance above forecasts for the current period, yet its shares were mostly flat in after-hours trading.
Some investors questioned whether the chipmaker is returning sufficient capital to shareholders. Yvette Schmitter, CEO of Fusion Collective, pointed out that while Nvidia generated $35 billion in cash during the fourth quarter, it returned just 12% to shareholders — sharply lower than 52% a year earlier.
She also raised concerns about reduced buybacks despite record cash generation, especially as Nvidia highlights strong demand for its sold-out Ampere chips.
These concerns echoed questions raised during the company’s earnings call, including from a UBS analyst who asked whether Nvidia plans to distribute more of the anticipated $100 billion in cash expected this year. CFO Colette Kress emphasized ongoing investment in the broader AI ecosystem, while CEO Jensen Huang underscored AI’s foundational role in the future of computing.
Salesforce Drops on Soft Revenue Outlook
Salesforce shares fell in extended trading after the company issued fiscal 2027 revenue guidance below Wall Street expectations, suggesting softer demand for enterprise software amid economic uncertainty and tighter corporate budgets.
The company projected full-year revenue between $45.80 billion and $46.20 billion, slightly below consensus estimates at the midpoint.
Salesforce continues to invest heavily in artificial intelligence to counter investor concerns that emerging AI models, such as those developed by startups like Anthropic, could erode demand. These pressures have contributed to stock volatility as the company works to defend its position within the software-as-a-service industry.
However, Salesforce raised its fiscal 2030 revenue forecast to $63 billion from $60 billion, citing expected growth from agentic AI offerings. Analysts at Vital Knowledge described the report as not flawless but “good enough,” highlighting strong AI product momentum, stable core performance, and solid cash flow generation.
Oil Steady Before U.S.- Iran Talks
Oil prices were largely unchanged Thursday, remaining near seven-month highs as markets prepared for a third round of nuclear discussions between Washington and Tehran.
Brent crude gained 0.2% to $70.84 per barrel, while U.S. West Texas Intermediate rose 0.2% to $65.62 per barrel.
U.S. representatives, including special envoy Steve Witkoff and adviser Jared Kushner, are scheduled to meet Iranian officials in Geneva as negotiations continue over Iran’s nuclear program. President Donald Trump has warned that failure to make meaningful progress could lead to serious consequences, raising concerns that prolonged tensions may disrupt supply from Iran, a key OPEC producer.
Gold Edges Higher
Gold prices ticked up as uncertainty surrounding U.S. trade tariffs bolstered safe-haven demand, with investors also monitoring developments in the U.S.-Iran nuclear talks.
Spot gold rose 0.6% to $5,196.55 per ounce, while U.S. gold futures dipped 0.5% to $5,200.54 per ounce.
Markets are also evaluating the implications of newly announced U.S. tariffs following a Supreme Court ruling that struck down President Trump’s sweeping reciprocal tariff measures. Attention now turns to upcoming U.S. economic data, including weekly jobless claims. So far this year, gold has remained supported by geopolitical tensions, central bank buying, and portfolio diversification trends.
Gold edged higher in Asian trading on Wednesday, recovering slightly after the prior session’s pullback driven by profit-taking, as markets weighed the effects of newly enacted U.S. tariffs and looked ahead to upcoming U.S.–Iran negotiations later this week.
Spot gold climbed 0.8% to $5,184.55 per ounce as of 21:08 ET (02:08 GMT), while U.S. gold futures advanced 0.5% to $5,203.10 an ounce. The metal had dropped 1.6% on Tuesday, ending a four-day winning streak.
On Tuesday, the U.S. began enforcing a temporary 10% blanket import tariff, with the Trump administration aiming to raise it to 15%. The move has heightened concerns about global trade disruptions and inflationary pressures. This action came after a U.S. Supreme Court decision last week invalidated earlier broad tariffs introduced under emergency powers, prompting the government to reinstate duties using alternative legal grounds.
Investors also monitored geopolitical developments, as Washington and Tehran are scheduled to hold a third round of nuclear discussions in Geneva on Thursday.
Despite the rebound, gold’s upside remained limited amid expectations that U.S. interest rates will stay higher for longer. Two Federal Reserve officials indicated on Tuesday that there is little urgency to adjust monetary policy, reinforcing a rate outlook that tends to weigh on non-yielding assets like gold.
Additional pressure came from a firmer U.S. dollar, which makes commodities priced in dollars more expensive for foreign buyers. The U.S. Dollar Index was broadly unchanged after rising 0.1% in the previous session.
Among other precious metals, silver gained 1.6% to $88.59 per ounce, while platinum surged 2.3% to $2,224.60 an ounce.
Oil price
Oil prices stayed close to seven-month peaks on Wednesday, as fears of potential U.S.–Iran military confrontation that could disrupt crude supplies kept investors cautious ahead of fresh talks scheduled for Thursday.
Brent crude rose 43 cents, or 0.6%, to $71.20 per barrel by 0400 GMT, while WTI gained 38 cents, or 0.6%, to $66.01. Brent touched its highest level since July 31 last week, and WTI reached its strongest point since August 4 earlier this week. Both benchmarks have remained elevated as Washington deployed additional military assets to the Middle East in an effort to pressure Tehran into negotiations over its nuclear and ballistic missile programs.
A prolonged conflict could threaten exports from Iran—the third-largest producer within Organization of the Petroleum Exporting Countries—as well as other key producers in the region. Analysts at ING noted that persistent uncertainty is likely to keep a significant geopolitical risk premium embedded in prices, leaving markets highly responsive to new developments.
U.S. representatives Steve Witkoff and Jared Kushner are expected to meet Iranian officials in Geneva on Thursday for a third round of negotiations. Iran’s Foreign Minister Abbas Araqchi said a deal is achievable, provided diplomacy takes precedence. Meanwhile, Donald Trump has warned of “very bad consequences” if no agreement is reached, with uncertainty remaining over whether Iran’s potential concessions would satisfy Washington’s demand for zero uranium enrichment, according to IG analyst Tony Sycamore.
Heightened tensions have also coincided with reports that Iran and China are advancing discussions over the purchase of Chinese anti-ship cruise missiles, which could pose a threat to U.S. naval forces stationed near Iran’s coastline. Experts say such weapons would significantly bolster Tehran’s strike capabilities.
Trump is set to address Congress in his State of the Union speech on Tuesday evening, where he is expected to outline his Iran strategy, though specific details have not been disclosed.
Beyond geopolitics, traders are monitoring supply-demand dynamics. The American Petroleum Institute reportedly showed a sharp 11.43-million-barrel increase in U.S. crude inventories for the week ended February 20, even as gasoline and distillate stocks declined. Official data from the U.S. Energy Information Administration is due later Wednesday.
Oil prices edged higher during Asian trade on Tuesday, remaining just under the seven-month peaks reached in the prior session, as markets looked ahead to upcoming U.S.–Iran discussions later this week. Ongoing uncertainty surrounding trade tariffs continued to temper investor sentiment.
At 22:22 ET (03:22 GMT), Brent crude futures climbed 0.8% to $72.04 per barrel, while U.S. West Texas Intermediate (WTI) crude futures also advanced 0.8% to $66.81 per barrel.
Both benchmarks had approached seven-month highs in the previous session before ending slightly lower.
Market participants are holding back ahead of US – Iran talks scheduled for later this week.
Markets stayed tense ahead of a third round of nuclear talks between Washington and Tehran set for Thursday in Geneva. Strains have persisted since last week amid indications that the situation could escalate. The U.S. pulled some non-essential embassy staff from Beirut, underscoring concerns that diplomacy might collapse and spark conflict.
President Donald Trump warned in a social media post on Monday that it would be a “very bad day” for Iran if no agreement is reached.
“In the event of a deal, we would likely see a significant unwinding of the risk premium currently built into prices — though securing such an agreement is far from straightforward,” analysts at ING noted.
A failure in negotiations could heighten worries about stricter sanctions enforcement or potential disruptions in the Strait of Hormuz, a crucial corridor for global crude shipments. Fears of a possible military clash contributed to a 6% surge in oil prices last week.
Tariff tensions under Donald Trump weigh on demand outlook
Oil markets are also contending with wider macro uncertainty after the Supreme Court of the United States invalidated an earlier round of tariffs introduced under emergency powers.
Donald Trump has since sought to reinstate duties of up to 15% using alternative legal provisions and cautioned that countries that “play games” in trade negotiations with the U.S. could be hit with steeper tariffs.
The risk of renewed trade tensions has darkened the global growth and fuel demand outlook, limiting oil’s advance even as geopolitical concerns continue to lend support to prices.
Oil prices fell more than 1% in Asian trading on Monday, taking a breather after last week’s sharp rally, as investors assessed the likelihood of a third round of U.S.-Iran nuclear negotiations and renewed uncertainty around U.S. trade policy.
By 20:50 ET (01:50 GMT), Brent crude for April delivery dropped 1% to $71.03 a barrel, while WTI crude declined 0.9% to $65.75 a barrel.
Both benchmarks had climbed nearly 6% last week amid signs of a potential U.S.-Iran confrontation and an unexpected drawdown in U.S. crude inventories, which supported prices.
Traders watch third round of U.S.- Iran nuclear talks
Iran and the United States are expected to hold a third round of nuclear discussions on Thursday in Geneva, raising hopes that tensions may ease.
Iranian Foreign Minister Abbas Araghchi told CBS’s “Face the Nation” on Sunday that there is a strong possibility of reaching a diplomatic resolution, adding that an agreement is within reach. Markets viewed the remarks as a signal of potential compromise.
Iran is a major producer within OPEC and possesses some of the largest proven oil reserves globally. The country also borders the Strait of Hormuz, a vital chokepoint that handles about one-fifth of the world’s seaborne oil. Any escalation involving Iran could disrupt shipments and drive up freight and insurance costs.
Trump raises global tariffs to 15%
Meanwhile, U.S. President Donald Trump unveiled new global tariffs, initially imposing a 10% duty on imports for 150 days after the U.S. Supreme Court invalidated his previous, broader tariff plan.
The administration increased the rate to 15% on Saturday—the maximum permitted under the applicable law—adding fresh uncertainty to global trade and demand prospects.
Higher tariffs can strain supply chains and prompt retaliatory actions from trade partners. Slower trade activity and weaker industrial production typically weigh on fuel consumption.
Oil prices moved modestly higher in Asian trading on Friday, building on strong gains from the prior two sessions and putting major benchmarks on course for roughly a 6% weekly advance, as rising tensions between the U.S. and Iran heightened concerns about potential supply disruptions in the Middle East.
By 22:41 ET (03:41 GMT), Brent for April delivery climbed 0.2% to $71.81 a barrel, while West Texas Intermediate (WTI) crude rose 0.5% to $66.78 a barrel.
Both contracts were hovering near their highest levels since early August and were set to record weekly gains of more than 6%.
Oil near six-month high on US-Iran tensions
Investor anxiety has intensified after U.S. President Donald Trump warned Tehran that “bad things” could follow if a nuclear agreement is not reached within roughly 10–15 days, raising the possibility of military action.
According to a Wall Street Journal report, Trump is considering a limited strike on Iranian targets to pressure Tehran into accepting a nuclear deal.
Any escalation involving Iran — a key OPEC producer — could jeopardize shipments through the Strait of Hormuz, a vital passageway that handles about one-fifth of global oil trade, thereby increasing the market’s sensitivity to geopolitical risk.
This week’s rally also marked a rebound from earlier losses, when prices slipped at the start of the week on hopes that U.S.-Iran negotiations were making progress. The renewed tough rhetoric has since restored a geopolitical risk premium, pushing crude back toward multi-week highs.
US crude inventories drop sharply – EIA
Data from the U.S. Energy Information Administration on Thursday showed crude stockpiles fell by around 9 million barrels last week, defying expectations for a 1.7 million-barrel increase.
The report also indicated declines in gasoline and distillate inventories, both coming in below forecasts, suggesting solid demand from refiners and consumers.
Markets are now awaiting the release of the U.S. Personal Consumption Expenditures (PCE) Price Index later on Friday — the Federal Reserve’s preferred measure of inflation.
Following recent hawkish Fed minutes that signaled policymakers are in no rush to cut interest rates, the PCE data could offer additional insight into the central bank’s policy trajectory.
WTI prices could stage a rebound as supply concerns intensify amid escalating US-Iran tensions and stalled Ukraine-Russia negotiations.
Talks between Washington and Tehran have yielded little concrete progress, with Iranian officials only اشاره to a broad framework for a potential nuclear agreement, leaving uncertainty over future crude exports.
Meanwhile, peace discussions between Ukraine and Russia held in Geneva concluded without a breakthrough, sustaining geopolitical risks that may continue to underpin oil prices.
West Texas Intermediate (WTI) crude slips slightly on Thursday after plunging 4.9% in the previous session, hovering around $65.00 per barrel during Asian trading. Despite the recent drop, oil prices may find support from potential supply disruptions linked to rising US-Iran tensions and stalled Ukraine-Russia peace efforts.
Negotiations between Washington and Tehran remain unresolved. Iranian officials have pointed to a “general agreement” on the framework of a possible nuclear deal, but key differences persist. US Vice President JD Vance stated that Iran failed to meet Washington’s red lines, while US President Donald Trump reiterated that military action remains an option. Reports suggest that any potential US strike could develop into a prolonged campaign, with Israel advocating for an outcome aimed at regime change in Iran.
Meanwhile, peace talks in Geneva between Ukraine and Russia concluded without tangible progress, according to Reuters. Ukrainian President Volodymyr Zelenskiy accused Moscow of stalling US-backed diplomatic efforts to end the four-year conflict. Trump has urged Kyiv to consider a deal that could involve significant concessions, even as Russian forces continue attacking energy infrastructure and making battlefield advances.
On the trade front, India’s state-run Bharat Petroleum Corporation Limited (BPCL) reportedly made its first-ever purchase of Venezuelan crude, while HPCL Mittal Energy Limited resumed buying cargoes from Venezuela for the first time in two years.
In US inventory data, the American Petroleum Institute (API) reported a 0.609 million-barrel decline in weekly crude stocks, partially offsetting the previous week’s massive 13.4 million-barrel build — the largest increase since January 2023.
Oil prices moved sideways in Asian trading on Monday, as attention centered on renewed diplomatic engagement between the U.S. and Iran, with investors wary of possible supply disruptions in the Middle East.
Trading activity remained subdued due to public holidays in China and the U.S., while weak Japanese growth figures added to worries about slowing demand. Brent crude for April delivery slipped 0.2% to $67.65 per barrel by 21:15 ET (02:15 GMT).
U.S.– Iran nuclear talks to resume
The U.S. and Iran are set to hold a second round of discussions in Switzerland this week regarding Tehran’s nuclear program, following the restart of negotiations earlier in February. However, diplomatic efforts coincided with Washington deploying a second aircraft carrier to the Middle East and signaling readiness for extended military action should talks collapse.
President Donald Trump reiterated warnings that Iran must agree to a deal or risk further military measures. Over the weekend, Iranian officials indicated a willingness to make concessions on their nuclear activities in exchange for relief from tough U.S. sanctions, adding that the next move rests with Washington.
Tensions between the two countries have recently supported oil prices, as traders factored in a higher geopolitical risk premium amid fears of renewed conflict that could disrupt Iranian oil output.
OPEC+ considering renewed output increases
At the same time, some of oil’s geopolitical premium was tempered by a Reuters report suggesting that OPEC+ intends to restart production hikes from April. Higher output would enable member countries to capitalize on recent price gains, though increased supply could weigh on prices over the longer term.
The group is scheduled to meet on March 1.
Oil markets were pressured throughout 2025 by concerns of excess supply in 2026. Although OPEC+ gradually raised production last year, it paused further increases in December due to persistent oversupply worries.
Nonetheless, crude prices climbed to a six-month high in early 2026 amid escalating Middle East tensions, while signs of global economic resilience fueled expectations that demand would stay firm.
Oil prices were mostly stable in Asian trading on Friday but remained on course for a weekly loss after plunging nearly 3% in the prior session, as expectations of a substantial supply surplus and rising inventories pressured sentiment. By 21:07 ET (02:07 GMT), Brent crude for April delivery was up 0.1% at $67.56 a barrel, while WTI crude also edged 0.1% higher to $62.87. Both benchmarks had dropped close to 3% previously, leaving them down about 1% for the week.
IEA projects oil supply surplus and weaker demand growth outlook.
The International Energy Agency, in its latest monthly report, projected that the global oil market could see a surplus exceeding 3.7 million barrels per day in 2026, pointing to a pronounced supply overhang.
It also noted that global stockpiles grew last year at one of the fastest paces since the pandemic, reflecting comfortable supply levels. The agency lowered its forecast for global demand growth, citing a softer economic outlook and moderating consumption, even as non-OPEC production stays strong. This combination of weaker demand and resilient output has intensified concerns about prolonged oversupply.
In the U.S., the Energy Information Administration reported an 8.53 million-barrel increase in crude inventories this week—well above expectations and the largest build since January 2025—indicating sluggish refinery demand and abundant supply.
U.S.- Iran nuclear talks under scrutiny; U.S. CPI data awaited.
Meanwhile, investors monitored geopolitical developments after Donald Trump said negotiations over a potential U.S.-Iran nuclear deal could last up to a month.
The possibility of extended talks eased immediate fears of supply disruptions in the Middle East, reducing the geopolitical premium that had previously supported prices. Attention is also turning to U.S. CPI data due later Friday, which may provide further insight into the Federal Reserve’s rate outlook after strong January employment figures dampened hopes for near-term rate cuts.
Deutsche Bank analysts highlight that Brent crude has continued to climb as investors respond to escalating geopolitical tensions involving Iran, along with new remarks from President Trump following his meeting with Israel’s Prime Minister.
According to the bank, speculation over a possible US military strike on Iran, combined with ongoing diplomatic talks, is helping to underpin oil prices, pushing both Brent and WTI higher.
Iran-related risk premium lifts Brent
Regarding recent developments, President Trump met Israeli Prime Minister Netanyahu at the White House yesterday, stating that he had “urged that negotiations with Iran proceed to determine whether a deal can ultimately be reached.”
He later wrote on social media that “Previously, Iran chose not to make a deal and faced Midnight Hammer — which did not turn out well for them. Hopefully, this time they act more reasonably and responsibly.”
By the end of the session, Brent crude had risen 0.87% to $69.40 per barrel, and it gained a further 0.25% this morning to reach $69.57 per barrel.
Oil prices advanced in Asian trading on Wednesday as investors monitored developments in U.S.-Iran relations and looked ahead to travel demand during an upcoming major holiday in China.
Crude rebounded from part of the previous session’s losses, supported by a softer U.S. dollar ahead of key economic data releases.
By 21:04 ET (02:04 GMT), April Brent futures climbed 0.6% to $69.18 a barrel, while WTI crude futures also gained 0.6% to $64.19 a barrel.
Oil prices rise amid US-Iran tensions over potential supply disruptions.
On Tuesday, Iranian officials stated that recent nuclear discussions with the United States helped Tehran assess Washington’s intentions, adding that diplomatic engagement between the two nations would continue.
The remarks followed talks held last week regarding Iran’s nuclear program, which came after U.S. President Donald Trump sent several warships to the Middle East.
Although both sides indicated some progress from their weekend negotiations, attention shifted after the U.S. issued a maritime warning for vessels passing through the Strait of Hormuz.
Media reports also suggested that Trump was weighing the deployment of a second aircraft carrier near Iran—a step that could significantly heighten regional tensions.
Amid the uncertainty, oil markets incorporated a risk premium, as traders grew concerned that potential military action might disrupt Iranian oil supplies.
China’s Lunar New Year travel surge draws attention as CPI data falls short of expectations.
Oil prices found some support on expectations of stronger Chinese fuel consumption during the upcoming Lunar New Year holiday.
This year’s Lunar New Year, marking the Year of the Horse in the Chinese zodiac, falls on February 17 and will be observed with an extended nine-day public holiday from February 15 to 23.
The festive period typically drives higher consumer spending in China, particularly in travel. Authorities project a record 9.5 billion passenger journeys during the spring holiday travel rush.
International travel is set to include several favored destinations across Southeast Asia, though flights to Japan have reportedly declined sharply amid escalating diplomatic tensions between Beijing and Tokyo.
Meanwhile, recent economic data signaled that deflationary pressures persist in China, as consumer price index figures came in below expectations and producer prices continued to contract.
Oil prices edged lower in Asian trade on Tuesday, giving back some of the previous session’s gains as markets focused on U.S.–Iran tensions and awaited key economic data. Crude had jumped more than 1% earlier after reports suggested Washington was taking a more cautious stance toward Iran, offsetting optimism from weekend talks.
A weaker dollar had supported prices, though the greenback stabilized on Tuesday. Brent futures slipped 0.1% to $68.99 a barrel, while WTI fell 0.2% to $64.06.
The United States has released a maritime advisory concerning Iran.
On Monday, the U.S. Maritime Administration warned U.S.-flagged ships to keep as much distance as possible from Iranian waters while transiting the Strait of Hormuz and the Gulf of Oman, advising vessels to remain closer to Oman due to the risk of boarding by Iranian forces.
The advisory underscored ongoing tensions between Washington and Tehran, despite recent diplomatic talks showing some progress and commitments to further negotiations on Iran’s nuclear program, which remain strained as Iran has largely dismissed calls to halt nuclear enrichment.
Markets are awaiting upcoming economic data releases from the United States and China.
This week’s focus is on economic data from the world’s largest oil consumers, which is expected to shape demand expectations. In the U.S., January nonfarm payrolls are due on Wednesday, followed by consumer price index inflation data on Friday, with both releases likely to influence interest-rate outlooks amid an upcoming leadership transition at the Federal Reserve. In China, CPI data is also scheduled for Friday, just ahead of the week-long Lunar New Year holiday, when travel activity and fuel demand are expected to increase.
Oil prices slipped in Asian trading on Monday as the United States and Iran indicated they would continue negotiations over Tehran’s nuclear program, easing concerns about heightened tensions in the Middle East.
Crude prices were also weighed down by a firmer U.S. dollar ahead of a busy week of key U.S. economic data, extending losses after a roughly 2% decline last week. Investors are additionally awaiting major economic releases from China, the world’s largest oil importer.
Brent crude futures for April dropped 0.7% to $67.57 a barrel by 21:17 ET (02:17 GMT), while West Texas Intermediate futures also fell 0.7% to $63.12 a barrel.
U.S. and Iran agree to press ahead with nuclear negotiations
Washington and Tehran said over the weekend that indirect nuclear negotiations will continue following what both sides described as constructive talks in Oman on Friday.
The statements helped ease fears of an imminent military confrontation in the Middle East, particularly after the United States had earlier deployed several warships to the region.
Concerns over a potential conflict had previously pushed traders to build a higher risk premium into oil prices, with former President Donald Trump also issuing threats of military action against Iran.
However, the likelihood of a full-scale war in the region now appears reduced, even as Tehran indicated it will continue advancing its nuclear enrichment activities.
Markets await key U.S. and China economic data
Attention this week is also on a slate of major economic data from the world’s largest oil-consuming economies.
In the United States, January nonfarm payrolls figures are due on Wednesday, followed by CPI inflation data on Friday. These releases will be closely scrutinized for further signals on the interest-rate outlook, as markets continue to assess the direction of monetary policy under Warsh.
In China, January CPI data is also scheduled for release on Friday, providing fresh insight into conditions in the world’s biggest oil importer.
The data arrives just ahead of China’s week-long Lunar New Year holiday, which is expected to boost fuel demand across the country.
After closing the prior week comfortably above the 65.000 level, WTI Crude Oil began this past Monday with a sharp selloff, dropping to nearly 63.300. From there, price action largely revolved around that area throughout the week, with technical levels guiding the back-and-forth movement.
Heading into the weekend, WTI is trading near 63.490 and is likely to open with early momentum when markets reopen on Monday. Overall, crude appears to have formed a central pricing zone, reflecting a higher equilibrium that remains reluctant to drift too far from lower levels. Resistance seems to be forming near 65.500, while the 61.000 area is acting as a key support floor—though, of course, there is no guarantee prices will remain confined within this range.
Short-Term Outlook and Retrospective Analysis
While some market participants attribute higher WTI crude prices to geopolitical concerns in the Middle East—particularly surrounding Iran and the buildup of U.S. military forces in the region—another factor may be the recent stretch of record cold temperatures across the United States. Notably, WTI crude had been trading with support near the 59.000 level up until January 22.
The challenge with any of these explanations is the possibility that WTI crude is simply trading higher due to speculative forces, even though broader factors are clearly influencing market sentiment. The combined impact of geopolitical tensions involving Iran and unusually cold weather in the U.S. may be shaping positioning decisions among large market participants. At the same time, WTI has returned to a price range that was already tested back in August 2025, underscoring that this valuation zone is not unfamiliar territory for the commodity.
Support and Resistance Levels in Focus This Week
Broader financial markets continue to display signs of unease, with many large traders and institutions positioning defensively and expressing limited confidence in signals coming from other asset classes.
By contrast, WTI crude oil has continued to grind along within a familiar and well-defined range, potentially creating opportunities for speculative positioning. The opening price action on Monday will be worth watching, especially given that the prior week began with a sharp selloff at the open. A repeat of that move appears less likely this time, as market anxiety seems to have eased somewhat compared with last week. If WTI opens in a more orderly fashion, it could present attractive opportunities to engage around key technical levels.
WTI Crude Oil Weekly Market Outlook
If WTI crude oil moves higher at the start of Monday’s session and approaches the 64.000 level, traders may look to target slightly higher price zones. That said, day traders should avoid becoming overly aggressive, as the 64.500 area could present stiff resistance unless upside momentum is firmly maintained. For now, a sharp acceleration to higher levels appears unlikely, with a decisive breakout probably requiring fresh catalysts—such as escalating developments involving Iran—to overcome established resistance.
Conversely, if WTI opens lower on Monday, the early reaction around the 63.000 support level will be key. A successful hold there would suggest larger participants are comfortable maintaining the current price equilibrium. However, a sustained break below 63.000 lasting several hours could indicate reduced concern among major oil players, potentially opening the door to further downside movement.
Oil prices slipped in Asian trading on Friday and were on track for a weekly loss, as markets focused on whether upcoming U.S.–Iran talks could ease Middle East tensions. Investors also priced in a lower risk premium and took profits after last week’s strong gains. Brent futures for April held at $67.58 a barrel, while WTI futures edged up 0.1% to $63.09 by 21:13 ET (02:13 GMT).
U.S.–Iran negotiations are scheduled to be held in Oman.
U.S. and Iranian officials are scheduled to hold talks in Oman later on Friday, as military tensions in the Middle East intensify following Washington’s deployment of at least two naval fleets to the region. Investors are optimistic that dialogue between Tehran and Washington could ease tensions and reduce the risk of a wider conflict, prompting traders to strip some geopolitical risk premium from oil prices this week.
However, differences have emerged over the scope of the discussions, with Iran rejecting U.S. demands to address its missile program and insisting that talks will focus solely on its nuclear ambitions. Iran is a key global oil producer and sits alongside the Strait of Hormuz, a critical chokepoint for global crude shipments.
Oil set for weekly decline as profit-taking and a stronger dollar weigh
Brent and WTI futures were down between 2.5% and 4% for the week, as prices came under pressure from profit-taking after six straight weeks of gains. Crude had earlier been supported by expectations of tighter supply, particularly after extreme weather in the U.S. disrupted output nationwide.
Supply disruptions in Kazakhstan and concerns over an escalation of conflict in the Middle East also lent support to prices. However, sentiment shifted this week as traders locked in profits, while a broader selloff across commodities—driven by a strengthening U.S. dollar—further weighed on oil markets. The dollar was on track for its strongest weekly performance since October, as investors viewed Kevin Warsh, U.S. President Donald Trump’s nominee for the next Federal Reserve chair, as a less dovish choice.
Oil prices fell in Asian trading on Thursday as traders pared back risk premiums after the U.S. and Iran confirmed talks would take place on Friday.
Crude was also weighed down by a stronger U.S. dollar, which firmed ahead of key January nonfarm payrolls data due on Friday. Attention was additionally focused on major central bank meetings in Europe and the UK later on Thursday.
Prices reversed some of Wednesday’s strong gains as investors locked in profits, though oil remained on track for a weekly decline after earlier losses driven by a broader selloff in commodity markets.
Brent crude futures for April slipped 1.4% to $68.50 a barrel, while West Texas Intermediate futures fell 1.3% to $63.80 a barrel by 20:42 ET (01:42 GMT).
Earlier, oil had found support from data showing U.S. inventories declined more than expected last week, as extreme cold weather disrupted production across the country.
U.S.– Iran talks are set to be held in Oman on Friday.
U.S. and Iranian officials are due to meet in Oman on Friday, as confirmed by both sides this week, though disagreements persist over the scope of the talks.
Washington has repeatedly pushed for the discussions to include Iran’s missile program, while Tehran has said it is only willing to negotiate on its nuclear activities. These differences had earlier raised doubts about whether the meeting would go ahead, a factor that helped lift oil prices earlier in the week.
Markets have also priced in a higher risk premium for crude amid concerns that U.S. President Donald Trump could follow through on threats to launch new strikes against Iran.
A stronger dollar weighs on markets as investors await central bank meetings and upcoming payrolls data.
A firmer dollar added pressure to oil prices, as the greenback attracted strong demand this week.
Expectations around interest rate decisions from the Bank of England and the European Central Bank on Thursday prompted traders to move into the dollar, while attention also remained on upcoming U.S. nonfarm payrolls data.
The dollar rebounded sharply from near four-year lows after President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair, a choice seen as less dovish by markets.
Investors are now focused on January nonfarm payrolls data due on Friday, which is expected to provide clearer signals on the future path of U.S. interest rates.
WTI crude prices edged higher to around $63.75 during Wednesday’s Asian trading session.
The move came after the U.S. military said it shot down an Iranian drone that “aggressively approached” a U.S. aircraft carrier, heightening geopolitical tensions.
Oil prices were also supported by data showing U.S. crude inventories recorded their largest decline since August 2023.
West Texas Intermediate (WTI), the U.S. crude oil benchmark, was trading near $63.75 during Asian hours on Wednesday, edging higher amid rising concerns over escalating tensions between the United States and Iran. Market participants are also positioning ahead of the release of the U.S. Energy Information Administration’s (EIA) crude oil inventory report later in the day.
According to CNBC, the U.S. military shot down an Iranian drone on Tuesday that had “aggressively” approached the USS Abraham Lincoln aircraft carrier in the Arabian Sea. The incident comes at a time of heightened Middle East tensions, as U.S. President Donald Trump weighs potential military action against Iran.
Iran has also insisted that talks with the United States this week be held in Oman rather than Turkey, and that negotiations be limited to bilateral discussions focused solely on nuclear issues, further complicating an already fragile diplomatic process. Any escalation in tensions between Washington and Tehran—OPEC’s fourth-largest crude producer—could provide near-term support to WTI prices.
Meanwhile, the American Petroleum Institute’s (API) weekly report showed that U.S. crude inventories fell by 11.1 million barrels in the week ended January 30, sharply deeper than the 250,000-barrel decline seen the previous week and well below market expectations for a 700,000-barrel build. The sizeable drawdown in stockpiles could lend additional support to oil prices.
On the downside, renewed demand for the U.S. dollar may cap gains in dollar-denominated commodities. U.S. President Donald Trump’s nomination of Governor Kevin Warsh as the next Federal Reserve chair has led traders to expect a slower pace of interest rate cuts and a greater emphasis on reducing the Fed’s balance sheet under his leadership.
Oil prices climbed sharply during Asian trading on Wednesday, driven by reports of escalating tensions between the United States and Iran, which heightened fears of possible supply disruptions in the Middle East.
Crude prices also found support from industry figures showing an unexpected and substantial drawdown in U.S. oil inventories last week, as severe cold weather across the country curtailed production.
April Brent futures advanced 1.2% to $68.15 per barrel, while U.S. West Texas Intermediate crude rose 1.4% to $63.69 per barrel as of 21:01 ET (02:01 GMT).
Overnight reports indicated that U.S. forces shot down an Iranian drone that was approaching a U.S. aircraft carrier in the Arabian Sea.
In a separate incident, several Iranian gunboats were observed nearing a U.S.-flagged oil tanker in the Strait of Hormuz.
These developments came just ahead of planned talks between Washington and Tehran later this week. However, Iranian officials have reportedly insisted that the negotiations—scheduled for Friday—be limited to bilateral discussions focused solely on nuclear issues, raising uncertainty over whether the talks will proceed at all.
U.S. President Donald Trump has warned of further military action if Iran fails to comply with U.S. demands to rein in its nuclear program, while Tehran has vowed strong retaliation against any U.S. aggression.
Any escalation of military activity in the Middle East could potentially disrupt regional oil supplies, a risk that has helped support crude prices in recent trading sessions.
U.S. oil inventories fall sharply amid production disruptions, API data shows
Oil prices also found support from industry figures showing a large and unexpected drawdown in U.S. crude inventories.
Data from the American Petroleum Institute indicated that U.S. stockpiles fell by 11.1 million barrels in the week ended January 30, sharply contrasting with expectations for a 0.7 million-barrel build.
API figures often signal a similar outcome in the official inventory report due later in the day.
The sizeable drawdown was driven by severe cold weather across the United States, which disrupted oil production nationwide and hampered exports from the Gulf Coast.
Supply disruptions in the U.S. have also contributed to stronger oil prices in recent weeks.
Oil prices slid sharply in Asian trading on Monday after reports of talks between the U.S. and Iran reduced some of the geopolitical risk premium in crude, while traders also took profits following recent gains.
The decline came after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) kept output levels unchanged at a weekend meeting, in line with expectations.
Brent crude futures for April delivery plunged 3.3% to $67.07 a barrel by 20:31 ET (01:31 GMT).
Oil had climbed to near six-month highs last week amid fears of increased U.S. military action against Iran, while severe cold weather in North America was also seen as a threat to supply. However, prices came under pressure on Monday as traders moved to lock in profits.
Crude was further weighed down by a rebound in the U.S. dollar from recent four-year lows, after the greenback strengthened following President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair.
Trump says Iran is in “serious talks” with the U.S.
U.S. President Donald Trump said over the weekend that Iran was engaged in “serious talks” with his administration, raising the prospect of a possible easing of tensions between the two countries.
His remarks followed statements from Iranian officials indicating that preparations were underway for negotiations with Washington.
Trump has repeatedly warned of potential military action against Iran amid disputes over its nuclear program and domestic unrest, and has ordered the deployment of U.S. naval forces to the Middle East.
The move heightened fears of renewed U.S. strikes on Iran, raising the risk of further geopolitical instability in the Middle East and potential disruptions to regional oil supply. Crude prices surged as markets factored in a higher geopolitical risk premium.
Escalating tensions, alongside recent weather-related disruptions in the United States, helped lift oil prices despite lingering concerns over weak global demand and the possibility of an oversupplied market in 2026.
More recently, a significant production outage in Kazakhstan has also provided support to oil prices.
OPEC+ keeps output levels unchanged
OPEC+ on Sunday kept its oil output for March unchanged, reinforcing its decision to pause further production increases despite a recent rise in crude prices.
The group has raised output by roughly 2.9 million barrels per day through 2025, but announced an open-ended halt to additional hikes in November, after oil prices fell by around 20% over the past year.
OPEC+ also offered no forward guidance on production, likely reflecting elevated uncertainty surrounding the global economic outlook and ongoing geopolitical risks.
WTI crude oil has delivered two consecutive weeks of gains, giving day traders a favorable backdrop, and closed the weekend trading near $65.73. Prices at this level were last seen in the final week of September.
The previous period when WTI consistently held at similar elevated levels was from mid-June through the end of July 2025. While crude has traded higher at times since then, the notable development for technical traders is the growing durability of the current upward momentum.
From a chart perspective, support around $60.00 per barrel remained intact throughout the past week and began to demonstrate strength as early as Friday, January 23. As the new trading week gets underway, this technical stability may encourage renewed speculative buying, with some traders positioning for further upside in WTI prices.
Volatility and Turmoil Mark Commodity Markets Over the Past Week
In reality, WTI crude oil has remained relatively orderly, particularly given the absence of any extreme or destabilizing price swings. While the commodity did move higher, the advance was measured rather than explosive.
On Tuesday, WTI rose from the mid-$60 range to around the mid-$62 level, showing early signs of upward pressure. By Wednesday, prices continued to firm, reaching the mid-$63 area. Momentum strengthened further into Thursday and Friday, when price action clearly accelerated to the upside, reinforcing the constructive tone in crude oil trading.
By comparison with the turmoil seen in metals markets—and even in soft commodities such as cocoa and coffee—WTI crude oil has remained relatively restrained. Whether that composure will persist is an open question.
Commodity markets often experience bursts of speculative intensity in cycles, yet WTI has been notably subdued over the past several months. That said, the prolonged bearish trend, marked by steadily declining prices, appears to have paused and reversed, with crude moving higher over the last two weeks.
While geopolitical risks tied to Iran remain in the background, they are unlikely to be the primary driver behind the recent upside move in WTI prices.
Iran, Venezuela, and Shifting Dynamics in the Global Energy Market
Few things dominate markets like noise, with well-intentioned commentary offering countless explanations for sudden price moves in commodities. Weather events, wars, politics, trade agreements—even trivial anecdotes—are all quickly cited as causes. But the question remains: how many of these explanations actually reflect the true drivers behind price changes?
Commodity traders are highly seasoned, and major market participants operate with extensive intelligence gathered over months and even years. They work within long-term outlooks, but there is also one unavoidable factor: speculation.
At times, commodities move quickly simply because large orders enter the market and collective sentiment shifts. WTI crude oil is no exception to these forces. Over the past two weeks, buying interest in the energy sector has clearly increased.
Is this driven by speculative positioning, concerns about potential instability in the Middle East, or a blend of both? Beyond those considerations, fundamentals such as supply and demand also play a role—and by most measures, they remain relatively strong.
WTI Crude Oil Weekly Outlook: Market Poised After Recent Stabilization
The speculative trading range for WTI crude oil is seen between $59.20 and $70.10.
WTI has clearly pushed higher, with the $60.00 level and the mid-$60s now appearing to act as near-term support. As the new week begins, the key question is whether the $65.00 area can hold and establish itself as a more durable floor. Broader commodity markets have displayed renewed strength across several sectors in recent weeks.
The sharp advance in WTI may seem sudden, but it reflects a noticeable return of buying interest. Seasoned traders know crude oil has sustained higher price levels in the past, and its ability to post and maintain incremental gains has been evident over the last two weeks.
That said, risk management remains critical when trading WTI. Price reversals can occur quickly, and without disciplined controls, such moves can result in significant losses for speculative traders.
WTI prices slipped but were still on course for roughly 12% monthly gains, underpinned by elevated geopolitical risk premiums.
Iran warned of an unprecedented response following renewed threats from President Trump over nuclear negotiations.
Meanwhile, the Trump administration loosened some sanctions on Venezuela’s oil sector on Thursday to attract U.S. investment.
West Texas Intermediate (WTI) crude edged lower after three consecutive sessions of gains, trading near $64.00 a barrel during Asian hours on Friday. Still, the benchmark remained on track for about a 12% monthly increase, supported by a strengthening geopolitical risk premium.
Geopolitical tensions stayed elevated after Iran warned it would “defend itself and respond like never before” following renewed threats from U.S. President Donald Trump, who urged Tehran to engage in nuclear negotiations. Iranian officials cautioned that any provocation would be met with retaliation.
Tensions escalated further after the European Union designated Iran’s Islamic Revolutionary Guard Corps as a terrorist organization. Concerns were compounded by reports that the United States was bolstering its military presence near Iran, while Tehran announced live-fire military exercises in the strategically vital Strait of Hormuz, heightening worries over regional security.
Markets are closely watching the potential impact of these developments on shipping through the Strait of Hormuz, a critical chokepoint between Iran and the Arabian Peninsula that handles daily flows of crude oil and LNG. According to Dow Jones Newswires, Westpac Strategy Group warned that any regime change in Iran would likely be disorderly, unlike the U.S-backed removal of Venezuela’s Nicolas Maduro or targeted strikes such as those on Fordow.
Separately, the Trump administration eased certain sanctions on Venezuela’s oil sector on Thursday to attract U.S. investment following President Nicolas Maduro’s removal earlier this month. The U.S. Treasury authorized transactions involving Venezuela’s government and state-run PDVSA, allowing U.S. firms to produce, transport, sell, and refine Venezuelan crude.
Earlier this month, oil prices also drew support from supply disruptions in Kazakhstan, freeze-offs in the United States, and tighter U.S. restrictions on Russian oil purchases, helping underpin prices this year despite lingering expectations of global oversupply.
The S&P 500 ended the session largely unchanged ahead of a largely uneventful Federal Reserve meeting, which offered little new information beyond reaffirming that the U.S. economy remains in fairly solid condition. The tone of Chair Jay Powell’s press conference also suggested that, at least while he remains at the helm, there are likely to be few—if any—interest-rate cuts in the near term.
Earnings released after the close were mixed. Microsoft (NASDAQ: MSFT) fell roughly 6.5%, while Meta Platforms (NASDAQ: META) surged about 7.5%. From an options standpoint, both stocks had bearish setups heading into earnings, with elevated implied volatility and heavy call-delta positioning at higher strike levels. Following the results, implied volatility declined, causing higher-strike calls to lose value and prompting the unwinding of hedges.
For Meta, the key technical level was $700, which the stock managed to break through, at least initially. Revenue guidance significantly exceeded expectations, leading the market to overlook higher-than-expected capital expenditures for now. The key question will be whether Meta can hold above the $700 level once regular trading resumes.
For Microsoft, the key level was $500, which the stock failed to break despite reporting better-than-expected results. Investor sentiment was weighed down by weaker-than-expected growth in its Azure cloud business.
For Tesla (NASDAQ: TSLA), the setup ahead of earnings was more mixed, but $450 clearly stood out as the key level to break. So far, the stock has tested that threshold but has been unable to hold above it.
After-hours moves can be unpredictable, which is why it often makes sense to wait and see how price action develops during regular trading hours. How the CDS market trades tomorrow may be even more telling, potentially offering a clearer read on the true implications of the earnings reports.
For now, near-term rate expectations appear more closely tied to oil than to any other factor. Crude has broken out and moved above its 200-day moving average, a technical development that could set the stage for a rally toward $65 in the near term.
Whether looking at the 2-year or 10-year Treasury yield, the correlation with oil prices since late 2022 has been remarkably strong. As a result, if oil continues to move higher, it would likely put upward pressure on interest rates as well. In that sense, oil may have been the final missing link in the case for higher rates.
Oil prices climbed in Asian trading on Wednesday, extending the previous session’s gains after severe cold weather disrupted U.S. production, signaling tighter supply conditions.
Crude was also supported by a weaker dollar, which slid to near a four-year low this week, while markets continued to monitor heightened tensions between the United States and Iran following comments from President Donald Trump that a second armada was heading to the Middle East.
Brent futures for March edged up 0.1% to $67.66 a barrel, hovering near a four-month high, while U.S. West Texas Intermediate futures rose 0.2% to $62.53 a barrel by 20:49 ET (01:49 GMT).
Oil prices jump as U.S. snowstorm disrupts supply
Oil’s advance this week was largely fueled by a powerful winter storm sweeping across the United States, which disrupted crude output in several producing regions.
Exports from the U.S. Gulf Coast were also brought to a standstill, as heavy snowfall and sub-zero temperatures blanketed large parts of the country. According to Reuters estimates, roughly 2 million barrels per day of production were affected over the weekend.
These supply interruptions have prompted traders to brace for sharp drawdowns in U.S. crude inventories in the weeks ahead, signaling tighter supply conditions in the world’s largest oil-consuming market.
API data points to declining U.S. inventories
Figures from the American Petroleum Institute released late Tuesday showed an unexpected decline in U.S. crude inventories last week. Stockpiles fell by roughly 250,000 barrels, according to the API, defying expectations for a 1.45 million-barrel build.
The API report often foreshadows a similar trend in the official inventory data, which is scheduled for release later on Wednesday.
Oil gains on softer dollar ahead of Fed rate call
A weaker dollar also lent support to oil prices, as declines in the greenback tend to boost demand for commodities priced in the U.S. currency.
The dollar index fell to near a four-year low on Tuesday, weighed down by investor concerns over U.S. economic uncertainty, the impending Federal Reserve interest rate decision, and intermittent trade and geopolitical policy moves under President Donald Trump.
The Fed is broadly expected to keep interest rates unchanged at the end of its meeting later in the day, with markets focused on signals from Chair Jerome Powell regarding the policy outlook for the year ahead.
Oil prices edged lower in Asian trading on Tuesday as markets focused on rising US-Iran tensions, while also monitoring potential supply disruptions caused by extreme winter weather in the United States.
Crude had gained in recent sessions on fears that tensions with Iran could disrupt supply, while a severe snowstorm in the US was estimated to have shut in up to 2 million barrels of oil production over the weekend.
However, expectations of tighter supply were tempered after Kazakhstan signaled it would resume production at the Tengiz oil field, its largest producing asset.
Brent crude futures for March slipped 0.6% to $65.22 a barrel, while West Texas Intermediate futures fell 0.5% to $60.33 a barrel by 21:20 ET (02:20 GMT).
Iran tensions, US weather disruptions in focus
A US aircraft carrier and several destroyers were seen arriving in the Middle East over the weekend. President Donald Trump said last week that an “armada” was headed toward Iran, though he expressed hope it would not be used.
The deployment followed Trump’s warnings to Iran over the killing of protesters during recent nationwide demonstrations, although unrest has eased in recent weeks and his rhetoric toward Tehran has softened.
Meanwhile, a severe snowstorm in the US caused widespread disruptions, halting oil production and straining the power grid, with markets closely watching whether prolonged outages could further tighten crude supplies.
Kazakhstan signals plans to resume production at the Tengiz oil field.
Kazakhstan said on Monday it will resume output at the Tengiz oil field after a fire and power outage halted production. However, Reuters reported that initial volumes are expected to be limited, as the country has yet to lift a force majeure on CPC Blend exports.
Kazakhstan is the world’s 12th-largest oil producer and a member of OPEC and its allies. The group is expected to keep production levels unchanged at its February 1 meeting, after steadily increasing output through 2025 before announcing a pause late last year to curb prolonged weakness in oil prices.
Oil prices were largely flat in Asian trade on Thursday as U.S. President Donald Trump eased tariff threats related to Greenland. Market participants also weighed an increase in U.S. crude inventories alongside recent supply disruptions. At 22:07 ET (03:07 GMT), March Brent futures inched up 0.1% to $65.31 a barrel, while WTI crude rose 0.2% to $60.74. Both benchmarks have posted modest gains over the past two sessions, underpinned by supply concerns after OPEC+ member Kazakhstan suspended production at the Tengiz and Korolev oilfields on Sunday.
Trump retreats from tariff threats against Greenland
Market sentiment improved after President Trump unexpectedly softened his position on Greenland on Wednesday, stepping back from threats to impose tariffs on European countries as leverage to annex the Danish territory. He ruled out the use of force and indicated that a framework for a potential deal was emerging, easing concerns over a sharp escalation in U.S.–EU tensions that could have pressured global growth and energy demand. The de-escalation supported broader risk appetite, although oil markets remained cautious amid mixed supply and demand signals.
U.S. crude inventories increase again, API data shows
The American Petroleum Institute (API) reported that U.S. crude stockpiles increased by 3.04 million barrels in the week ending Jan. 16, following a build of more than 5 million barrels the previous week. Gasoline inventories surged by 6.21 million barrels, signaling weaker demand, while distillate stocks—including diesel and heating oil—slipped by 33,000 barrels.
On the demand front, oil prices drew some support after the International Energy Agency raised its forecast for global oil demand growth in 2026 on Wednesday. Despite the upward revision, the IEA continues to expect the oil market to remain in a substantial surplus through 2026.
WTI crude prices edged lower to around $59.25 in early European trading on Tuesday.
Tensions surrounding Iran have eased in recent days following earlier speculation about a potential U.S. attack.
Market attention is now turning to developments around Greenland after President Trump threatened to escalate tariffs on eight European countries.
West Texas Intermediate (WTI), the U.S. crude oil benchmark, was trading near $59.25 during early European hours on Tuesday. Prices edged lower as concerns over supply disruptions from Iran eased, while traders continued to assess the implications of the U.S. push to take control of Greenland.
There were no signs of escalating tensions in Iran over the weekend, although Supreme Leader Ayatollah Ali Khamenei said that 5,000 people were killed in anti-government protests this month, according to Reuters. The easing of tensions has reduced the risk of a potential U.S. attack that could disrupt supplies from a major OPEC producer, weighing on WTI prices.
Traders are turning their focus to the Greenland crisis after U.S. President Donald Trump said on Saturday that Washington would impose an additional 10% import tariff from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the United Kingdom until the U.S. is permitted to purchase Greenland.
Trump is expected to discuss Greenland at the World Economic Forum in Davos, Switzerland, on Wednesday, while European Union leaders are set to hold an emergency summit in Brussels on Thursday. Concerns that tensions could escalate into a broader U.S.–EU trade war have weighed on market sentiment and may add selling pressure to oil prices.
“With fears around Iran easing in recent days following rumors of a U.S. attack, market attention has shifted to the Greenland issue and the potential depth of any fallout between the U.S. and Europe, as an expanded trade conflict could weigh on demand,” said Janiv Shah, an analyst at Rystad.
Meanwhile, the American Petroleum Institute’s (API) crude inventory report is due later on Tuesday. A larger-than-expected draw could signal stronger demand and support WTI prices, while a bigger-than-forecast build would point to weaker demand or oversupply, potentially pressuring prices lower.
Oil prices are rising sharply, as WTI nears $62 and Brent crude moves up toward $66 per barrel. These increases highlight the market’s responsiveness to geopolitical tensions, despite no actual disruptions in supply. The question remains: where will prices go from here?
Main Highlights of WTI Crude Oil
WTI Crude Oil prices are sharply rising amid concerns that ongoing protests in Iran might escalate and impact production or disrupt the Strait of Hormuz.
However, this upward pressure is balanced by underlying fundamentals and a global surplus.
The current price around $62 is a crucial threshold: surpassing this resistance level could pave the way for a rally toward the six-month highs near $66.
In today’s trading environment, it can be difficult for market participants to isolate the key drivers of price action on a day‑to‑day basis. Beyond enduring themes like economic growth trajectories, inflation trends, the expansion of AI infrastructure, and sovereign debt pressures, fresh geopolitical tensions seem to emerge almost daily.
Amid simmering issues in places like Venezuela — and speculation about other potential flashpoints — Iran has become the dominant focus for energy markets. Nationwide protests there, sparked by severe economic strains and a collapsing currency, have raised serious questions about stability in one of the world’s most influential oil‑producing countries.
Although these demonstrations have not yet led to direct disruptions in oil output, the unrest has prompted traders to price in a growing geopolitical risk premium. Concerns about possible escalation — including the risk of broader conflict or disruption to key infrastructure such as the Strait of Hormuz, through which a large share of global seaborne oil exports transit — are contributing to recent volatility in crude prices.
As a reminder, Iran remains a key influence on global energy markets due to both its oil production capacity and its control over the Strait of Hormuz — a vital maritime chokepoint through which nearly 20 million barrels per day of crude and petroleum products transit, representing a large share of seaborne global oil flows. Any actual or perceived threat to exports or shipping through this route can have outsized impacts on pricing and risk sentiment.
Against this backdrop, oil prices have recently climbed, with Brent trading in the mid‑$60s and WTI previously approaching the $62 per barrel area, as traders price in geopolitical risk tied to the unrest in Iran. This reflects markets’ sensitivity to potential escalations, even though there have been no confirmed widespread production outages to date.
However, this upside is balanced by broader market fundamentals. Global oil inventories remain substantial, and additional output from other producers — including resumed Venezuelan exports and lingering oversupply concerns — continues to temper the rally. This backdrop helps explain why prices have fluctuated and, at times, pulled back when geopolitical anxieties ease.
Looking ahead, the future direction of crude prices is likely to hinge on developments in Iran’s domestic unrest and whether tensions translate into actual disruptions in oil production or interference with key export infrastructure such as the Strait of Hormuz. So far, most of the price appreciation has been driven by risk premium and sentiment rather than physical losses of barrels.
If broader instability were to disrupt supply routes or exports, markets could respond with a more pronounced and sustained price surge, particularly given the strategic importance of Middle East exports to the global oil system. However, short‑term moves are also currently influenced by macro factors such as inventory data and demand signals, as well as comments from policymakers that can quickly recalibrate risk perceptions.
Technical Analysis of Crude Oil: Daily Chart for WTI
Looking at the technicals, WTI Crude Oil is on a five-day winning streak, climbing from the lower end of its three-month trading range between $55 and $62 up to the upper boundary. Chart-wise, the current price level is a crucial threshold: a break above the $62 resistance — which also aligns with the 200-day moving average — could open the door for further gains toward the six-month highs around $66, where it would face resistance from the longer-term bearish trend line drawn from the second half of 2023’s peak.
Conversely, if indications emerge that the protests are easing and stability is being restored in Iran, the geopolitical risk premium currently weighing on crude prices may diminish. This could trigger a reversal, causing prices to retreat below the $60 mark. Regardless of the outcome, oil traders should closely monitor developments in Iran in the days ahead.
WTI crude slipped to around $60.70 during Wednesday’s Asian trading session, pressured by significant increases in U.S. crude stockpiles. Meanwhile, President Trump assured Iranian protesters that support is forthcoming.
West Texas Intermediate (WTI), the U.S. crude oil benchmark, was trading near $60.70 during Wednesday’s Asian session, as prices edged lower amid rising supply pressures. WTI has been pressured by Venezuela restarting oil exports and the latest American Petroleum Institute (API) report showing a large build in U.S. crude inventories, while traders await the official Energy Information Administration (EIA) stockpile figures later in the day.
According to Reuters and industry sources, Venezuela has begun reversing recent production cuts made under its previous U.S. oil embargo, allowing crude exports to resume. Two supertankers carrying roughly 1.8 million barrels each departed Venezuelan waters, potentially marking the first shipments under a 50‑million‑barrel supply arrangement with Washington, following U.S. control of the country’s exports after political developments.
U.S. crude inventories saw a significant increase last week, with the American Petroleum Institute (API) reporting a build of 5.27 million barrels for the week ending January 9. This contrasts sharply with the previous week’s drawdown of 2.8 million barrels and defies market expectations, which had forecasted a 2 million barrel decline.
Despite the growing stockpiles, ongoing geopolitical tensions in Iran—a key oil producer—could provide support for WTI prices. U.S. President Donald Trump canceled all planned meetings with Iranian officials and pledged assistance to protesters amid reports of a severe crackdown by Iranian security forces, which has resulted in hundreds of deaths. Trump has repeatedly warned that the U.S. would intervene if the Iranian government continues to target demonstrators.
WTI prices rise amid growing supply concerns linked to escalating unrest in Iran.
President Trump has warned Tehran against using force on protesters, while Iran has warned the U.S. and Israel against any intervention.
However, oil price gains may be capped due to anticipated resumption of Venezuelan exports and forecasts of a potential market oversupply.
West Texas Intermediate (WTI) crude extended its gains for a third consecutive session, trading around $59.10 per barrel during Asian hours on Monday. The rise in oil prices is driven by growing supply concerns amid escalating protests in Iran. As OPEC’s fourth-largest producer, exporting nearly 2 million barrels per day, any conflict escalation poses a significant risk to global supply.
The unrest, now in its third week and having reportedly resulted in hundreds of casualties, has prompted Iranian authorities to signal a harsher crackdown. Meanwhile, U.S. President Donald Trump warned Tehran against using force on protesters and suggested possible intervention if the situation worsens, while Iranian officials cautioned against any U.S. or Israeli involvement.
Oil price gains may be restrained by expectations that Venezuelan crude exports could resume following political changes in the country, with the U.S. poised to receive or manage up to 50 million barrels of sanctioned oil under a new arrangement with interim authorities. This potential influx of supply has tempered some of the upside from geopolitical risk.
However, uncertainty remains over the timing and scale of Venezuelan shipments, as shifting U.S. policy and the logistics of restarting exports from dilapidated ports and vessels cloud the outlook for actual flows.
Meanwhile, traders are watching for possible supply disruptions from Russia amid ongoing Ukraine attacks on energy infrastructure and the prospect of tougher U.S. sanctions on Russian energy exports — factors that could add upward pressure on prices if they materially reduce output.
Oil prices advanced during Asian trading on Friday, extending the previous session’s rebound as investors focused on possible supply disruptions in Russia and Iran amid geopolitical risks.
At the same time, fears of an immediate rise in Venezuelan oil output subsided after the U.S. Senate approved a measure requiring congressional authorization for further military action by President Trump.
Analysts said oil production in the country is unlikely to increase sharply in the near term, even with U.S. intervention.
Brent crude futures for March rose 0.7% to $62.44 a barrel, while WTI futures gained 0.7% to $58.03 by 21:04 ET (02:04 GMT). Both benchmarks rebounded to levels seen before last week’s U.S. military action in Venezuela after posting more than 4% gains on Thursday.
Oil prices were supported by positive inflation data from China, the world’s top oil importer, signaling a tentative economic recovery. However, gains were limited as traders remained cautious ahead of key U.S. nonfarm payrolls data that could affect interest rate expectations.
Markets focus on potential supply disruptions in Russia and Iran
Concerns about possible supply disruptions in Russia and the Middle East lent support to oil prices this week.
The conflict between Russia and Ukraine showed little sign of resolution, with ongoing military actions. A drone strike on a tanker headed to Russia in the Black Sea heightened fears of further interruptions to Russian crude supplies.
Compounding these concerns, reports indicated that U.S. President Donald Trump plans to endorse a bipartisan bill imposing even tougher restrictions on countries trading with Russia, aiming to increase pressure on Moscow to seek a ceasefire.
Meanwhile, Iraq’s government approved a move to nationalize operations at the West Qurna 2 oilfield—one of the world’s largest—in an effort to avoid supply disruptions stemming from U.S. sanctions on Russia.
In Iran, escalating nationwide anti-government protests have raised worries about potential impacts on oil production. The government responded with a countrywide internet blackout as demonstrations spread across major cities protesting the Nezam regime.
Market concerns over Venezuelan oil supply ease
Oil prices benefited from easing worries that a U.S. intervention in Venezuela would lead to a significant near-term surge in global crude supply.
Earlier this week, Trump stated that Caracas could deliver up to $3 billion worth of oil to the U.S. and indicated plans for long-term U.S. influence over the country.
However, Congress has advanced legislation that may restrict U.S. military involvement in Venezuela.
Many analysts noted that while U.S. involvement could eventually help boost Venezuelan oil production, persistent political turmoil and deteriorated infrastructure make any near‑term surge in output unlikely.
Oil prices initially plunged after the U.S. detained Venezuelan President Nicolás Maduro and signaled control over the country’s oil industry, but prices had fully recovered by Friday as markets judged immediate changes to supply to be limited.
Still, crude prices were experiencing their steepest annual decline in five years in 2025, weighed down by concerns over a widening supply glut and sluggish demand growth—an outlook echoed by major global institutions forecasting continued oversupply into 2026.
THE ETERNAL SOVEREIGN 