Middle East Tensions Boost Oil, But OPEC+ Acts as a Brake
The renewed geopolitical risks surrounding Iran have the potential to push Brent back above $70 per barrel, according to Heng Koon How (UOB). Essentially, the market is starting to "install" a geopolitical risk premium again—it has slowly crept into oil prices since tensions escalated, lifting Brent from its lows of around $60/barrel in December and pulling it back to a higher range.
However, UOB believes that while Middle East headlines could easily trigger price spikes, additional supply from OPEC+ will be a longer-term restraining factor. This means that as long as additional supply actually arrives and global demand doesn't spike dramatically, a purely geopolitically driven rally tends to be more fragile and vulnerable to corrections when tensions ease.
In terms of projections, UOB raised its Brent outlook to $75/barrel in the first quarter of 2026, $70/barrel in the second quarter, and $65/barrel in the second half of this year. This projection suggests that UOB sees peak pressure closer to the start of the year (when geopolitical tensions and risk premiums are high), then gradually easing as supply factors become more pronounced.
As for the latest prices, oil remains at "quite high" levels but has not yet broken out: Brent was recorded at around $67.48/barrel and WTI at around $63.49/barrel in trading on Wednesday (February 4), as the market continues to monitor developments between the US and Iran and potential disruptions in strategic waterways like the Strait of Hormuz.
Source: Newsmaker.id
