Brent Crude Approaches Six-Month Peak Amid Iran Attack Fears
Brent crude oil prices surged on Thursday, nearing a six-month peak, driven by mounting fears of a potential U.S. military strike on Iran, a significant oil producer exporting 3.2 million barrels per day. PVM analyst John Evans highlighted concerns about the impact of Iranian actions, particularly regarding the Strait of Hormuz, through which approximately 20 million barrels of oil traverse daily.
Brent Crude Price Surge
Brent crude futures increased by $2.61, or 3.8%, reaching $71.01 per barrel at 1404 GMT. This marks the highest level since August 1. Predictions suggest the contract could achieve a monthly gain exceeding 16% in January, the most substantial increase in four years.
U.S. Oil Prices Also Rise
Simultaneously, U.S. West Texas Intermediate (WTI) crude saw a rise of $2.54, or 4%, reaching $65.75 per barrel. WTI prices earlier hit $65.80, reaching a four-month high, and are projected to attain a monthly gain of 14%, the highest since July 2023.
Geopolitical Tensions Impacting Oil Markets
Heightened tensions have stemmed from U.S. President Donald Trump’s increased pressure on Iran to halt its nuclear program. This includes discussions of military options targeting Iranian security forces and leaders to encourage regime change.
- Brent crude prices projected to rise by $3-$4 per barrel due to geopolitical concerns.
- Citi analysts anticipate Brent may reach $72 per barrel in the coming three months.
Production Updates
Production disruptions are further tightening the oil market. The Tengiz oilfield in Kazakhstan is gradually restarting after electrical fires recently curtailed output. Full production is expected within a week.
In the U.S., following Winter Storm Fern, crude and gas producers are bringing wells back online. UBS analyst Giovanni Staunovo noted that these disruptions combined with adverse weather conditions have contributed to a tighter oil market than initially anticipated.
| Oil Type | Price per Barrel | Price Change | Monthly Gain |
|---|---|---|---|
| Brent | $71.01 | +3.8% | >16% |
| WTI | $65.75 | +4% | 14% |
The current landscape underscores the significant influence of geopolitical factors on oil prices, alongside production challenges. As tensions escalate, market participants remain vigilant about potential movements in oil supply and pricing.
