Global oil prices continued their upward trend on Monday, buoyed by geopolitical tensions between Iran and the United States. Following a 2% gain in the previous trading session, crude prices edged higher as concerns over potential supply disruptions rattled markets.
The price of Brent crude futures rose by 0.18% to $66 per barrel, while West Texas Intermediate (WTI) crude futures increased by 0.23% to $61.21 per barrel. Both benchmarks recorded weekly gains of 2.7%, closing last Friday at their highest levels since mid-January.
Geopolitical Concerns Drive Market Uncertainty
The ongoing confrontation between the U.S. and Iran has heightened fears of supply disruptions in the Middle East, a critical region for global energy production. Reports indicate that a U.S. aircraft carrier group and other military assets are en route to the region, further fueling market anxiety. President Donald Trump stated last Thursday that he hopes military action will not be necessary, urging Iran to avoid escalating the situation by resuming its nuclear program or cracking down on protesters.
Iran, however, remained defiant. A senior Iranian official warned that any attack on the country would be treated as an act of war. Market analysts, including Tony Sycamore of IG, noted that the U.S. military movements have added a geopolitical risk premium to oil prices, amplifying investor concerns and encouraging a broader aversion to risk.
Kazakhstan Pipeline Resumes Operations
Amid the heightened tensions, there was some relief for global energy markets as Kazakhstan’s Caspian Pipeline Consortium announced the resumption of full loading operations at its Black Sea terminal. The pipeline had been undergoing maintenance at one of its mooring points, temporarily affecting supply flows.
Winter Weather Disrupts U.S. Oil Production
Separately, a severe winter storm sweeping through the United States has led to significant disruptions in domestic oil and gas production. Analysts at JPMorgan reported that the adverse weather conditions have resulted in daily production losses of approximately 250,000 barrels, with operations in regions such as the Bakken Formation, Oklahoma, and Texas particularly affected.
Broader Market Implications
The International Energy Agency (IEA) recently adjusted its forecast for global oil demand growth in 2026, reflecting shifting supply and demand dynamics. Meanwhile, OPEC has maintained its outlook for demand growth, signaling steady expectations for the year ahead.
In addition to geopolitical factors, U.S. sanctions on Venezuelan oil exports have further tightened crude markets, driving up shipping costs for oil tankers globally. This has compounded concerns about supply chain vulnerabilities and contributed to the recent price volatility.
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