Oil prices took a sharp dip of approximately 2.5% in Asian trading on Thursday following remarks by U.S. President Donald Trump regarding the situation in Iran. The president stated that violence during Iran’s crackdown on protests is subsiding, which eased concerns over potential military actions and supply disruptions.
Brent crude fell to $64.85 per barrel, while West Texas Intermediate (WTI) dropped to $60.48 per barrel. Both benchmarks had gained over 1% during Wednesday’s trading session but relinquished most of those gains after Trump’s comments reduced fears of possible U.S. military strikes on Iran.
Geopolitical Tensions Ease
President Trump revealed on Wednesday that he was informed the killings of anti-government protesters in Iran had decreased. He also expressed his belief that there were no plans for mass executions. This development, along with the absence of imminent U.S. military action, contributed to a bearish sentiment in the oil market.
Hiroyuki Kikukawa, chief analyst at Nissan Securities, noted, “Selling pressure dominated due to expectations that the U.S. would not take military action against Iran.” He also highlighted that higher-than-expected U.S. crude oil inventories added to the downward pressure.
U.S. Crude Inventories Add to Price Pressures
Data from the U.S. Energy Information Administration (EIA) revealed that crude oil and gasoline inventories had surged past analyst forecasts last week. Crude stocks rose by 3.4 million barrels to 422.4 million barrels for the week ending January 9, defying expectations of a 1.7 million-barrel decline. This increase in inventories further weighed on oil prices.
Venezuelan Oil and Global Supply Outlook
In addition to the easing geopolitical tension in the Middle East, the global supply landscape is being reshaped by the return of Venezuelan oil. Sources reported that Venezuela is resuming crude exports after U.S.-imposed restrictions were lifted, though analysts believe its output will not challenge Saudi Arabia’s dominant position in global markets.
Despite these factors, the geopolitical risks associated with Iran and other regions remain elevated. Kikukawa expects WTI crude to trade within a range of $55 to $65 per barrel in the near term.
OPEC Maintains Demand Growth Forecast
On the demand side, the Organization of the Petroleum Exporting Countries (OPEC) announced on Wednesday that it is maintaining its forecast for global oil demand growth in 2026. OPEC’s data suggests a near-balanced supply and demand situation for the year, contrasting with other predictions of an oversupplied market.
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
→ 
→ 
→ 
→ 
→ 
→ 
→ 
