Oil prices continue to rise amid fears of supply disruptions from Iran
Kyiv • UNN
Brent and WTI crude futures rose on Tuesday. This comes amid escalating protests in Iran and potential US intervention, outweighing prospects for increased oil supplies from Venezuela.
Oil prices continued to rise on Tuesday amid fears about Iran and potential supply disruptions outweighing the prospect of increased oil supplies from Venezuela, UNN reports with reference to Reuters.
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Brent crude futures rose 22 cents, or 0.3%, to $64.09 a barrel by 04:30 GMT (06:30 Kyiv time), nearing a two-month high reached in the previous session. U.S. West Texas Intermediate crude rose 23 cents, or 0.4%, to $59.73.
"The price increase comes amid escalating protests in Iran, which raises the likelihood of some form of intervention from the United States," ING commodity strategists said on Tuesday.
Iran, one of the largest oil producers in the Organization of the Petroleum Exporting Countries (OPEC), has faced its largest anti-government demonstrations in years, prompting warnings from U.S. President Donald Trump of possible military intervention over deadly violence against protesters.
Trump is expected to meet with senior advisers on Tuesday to discuss options for action on Iran, a U.S. official told Reuters.
On Monday, the U.S. president said that any country doing business with Iran would be subject to a 25% tariff on all transactions with the United States. Iran exports most of its oil to China.
"With the U.S. and China having reached a trade truce, we question whether the U.S. will want to rock the boat again by imposing additional tariffs on China," ING strategists said.
Political developments matter for oil markets because Iran is a major sanctioned producer, and any escalation could disrupt supplies or add a geopolitical risk premium.
"In our view, the unrest in Iran has added about $3-4 per barrel of geopolitical premium to oil prices," Barclays said in a note.
Markets are also concerned about a possible increase in oil supply due to the expected resumption of exports from Venezuela. After the overthrow of President Nicolas Maduro, Trump said last week that the government in Caracas was ready to transfer up to 50 million barrels of oil, which is subject to Western sanctions, to the United States.
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Global oil trading companies were among the first winners in the race for control of Venezuelan oil flows, ahead of American energy giants.
Elsewhere, geopolitical tensions escalated after Russian forces launched attacks on two of Ukraine's largest cities early Tuesday, Ukrainian officials said, the publication writes.
In the United States, the Trump administration renewed its criticism of the Federal Reserve, highlighting market concerns about the central bank's independence and increasing uncertainty about future economic conditions and oil demand, the publication points out.
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