Oil prices rose as Iran suppressed civil unrest, and the likelihood of a U.S. intervention decreased
Oil prices edged higher on Monday, following gains in the previous session, as Iran’s deadly crackdown on protests quelled civil unrest and reduced the likelihood of a U.S. strike on Iran that could disrupt supply.
Brent crude was trading at $64.19 a barrel as of 03:27 GMT, up 6 cents or 0.09%. WTI rose 9 cents or 0.15% to $59.53 a barrel. That contract expires on Tuesday, and the more active March contract was trading up 5 cents or 0.08% at $59.39.
Iran’s violent crackdown on protests stemming from economic hardship has been settled, which officials say resulted in the deaths of 5,000 people, has been quelled.
Trump appeared to back down from earlier threats of intervention, saying on social media that Iran had abandoned its plans for mass executions of protesters.
This seems to have reduced the likelihood of a U.S. intervention that could disrupt oil flows, as such an intervention would have interrupted oil from Iran, the fourth-largest producer among OPEC members.
The decline marked a pullback from the highs reached last week, but prices still closed higher on Friday. However, the ongoing concern about a potential U.S. military intervention in the Gulf underscores the situation.
The pullback came after the rapid unwinding of the 'Iran premium,' which had driven prices to 12-week highs following signs of easing Iranian crackdown on protesters.
This was further highlighted by US inventory data showing a surplus and reinforcing downward supply pressures. The US Energy Information Administration (EIA) announced last week that crude oil inventories rose by 3.4 million barrels in the week ending January 9. This contradicted analysts' expectations of a 1.7 million barrel decrease.
US markets are closed on Monday for Martin Luther King Jr. Day.
Markets are closely watching plans for Venezuela's oil fields after the US said it would manage Venezuela's oil industry.
The US Energy Secretary said on Friday that the US was moving as quickly as possible to grant Chevron an expanded production license in Venezuela. However, markets are less optimistic about the expectations of increased production in the country.
Venezuela and Ukraine remain key risks in the background.
According to government data, China's refining capacity is projected to increase by 4.1% year-on-year in 2025, while crude oil production is expected to rise by 1.5% year-on-year in 2024, with both figures reaching all-time highs.
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