Oil Rises 1.5%: Market Warns US Could Strike Iran
Oil prices rose 1.5% on Thursday (January 29th), extending their gains for a third day. Markets are increasingly wary of concerns that the US could launch a military strike on Iran—a scenario that could potentially disrupt supplies from the Middle East.
At 07:30 GMT, Brent was up 94 cents (1.4%) at $69.34/barrel, while WTI was up 92 cents (1.5%) at $64.13/barrel. Both contracts have risen about 5% since Monday and are now at their highest levels since September 29th.
Prices were boosted by US President Donald Trump's increased pressure on Iran to halt its nuclear program, along with threats of attacks and the arrival of a US warship group in the region. Iran is the fourth-largest producer in OPEC, producing around 3.2 million barrels per day—so the market immediately places a "risk premium" on rising tensions.
Reuters also reported that Trump is considering the option of attacking Iranian security forces and leaders, according to a US source familiar with the discussions. But it's not just geopolitics: other supply disruptions are also contributing, including the gradual recovery of the giant Tengiz oil field in Kazakhstan after a power outage, as well as the recovery of production in the US following the extreme weather disruption caused by Winter Storm Fern.
Furthermore, the US oil stockpiles report provided a positive surprise for prices. US crude inventories fell by 2.3 million barrels to 423.8 million barrels in the week ending January 23, despite market expectations for a rise.
Some analysts believe that Iran risks have added a geopolitical premium of around $3–$4/barrel, and if the escalation continues, Brent could potentially reach $72/barrel in the next three months.
Source: Newsmaker.id
