Oil Heads for Third Weekly Gain as Geopolitical Risks Lift Prices

Oil prices extended gains on Friday, putting crude on track for a third consecutive weekly increase, as markets reacted to heightened geopolitical tensions involving Venezuela and Iran after a prolonged slump in 2025.

Brent crude and U.S. West Texas Intermediate (WTI) both traded higher in midday dealings, continuing a rebound after prices fell nearly 18% last year amid oversupply concerns and weaker global demand.

Midday Market Check (Jan 9, 2026):

• Brent crude: $62.43 a barrel, up 0.7%
• WTI crude: $58.19 a barrel, up 0.7%

The recent gains reflect growing unease over potential supply disruptions, even as traders remain cautious about the longer-term balance between production and demand.

Venezuela and Iran in focus

Market attention has been drawn to developments in Venezuela following a high-profile U.S. operation earlier this month that reportedly resulted in the capture of Nicolás Maduro. U.S. officials have indicated that Washington intends to oversee the marketing of a portion of Venezuelan crude currently under sanctions, a move that could temporarily add supply to the market while also reshaping regional energy flows.

Analysts note that while the potential release of tens of millions of barrels would be meaningful, it remains small compared with global oil consumption of around 100 million barrels per day. As a result, the development is being viewed more as a source of near-term volatility than a structural shift in supply.

Tensions have also increased in the Middle East. Reports of intensified protests in Iran and disruptions to communications services this week have added to investor caution. Donald Trump warned of a firm U.S. response if Iranian authorities escalate the crackdown, reinforcing concerns about stability in one of the world’s key oil-producing regions.

Adding another layer of uncertainty, U.S. lawmakers are debating tougher sanctions aimed at curbing Russia’s oil revenues. While proposals under discussion include significantly higher penalties on countries purchasing Russian crude, industry executives have described such measures as pressure tactics rather than imminent policy, noting the potential for severe market disruption if implemented in their most extreme form.

Despite the renewed focus on geopolitics, some analysts caution that fundamentals could limit further price gains. Global inventories are estimated to have risen sharply last year as OPEC+ and non-OPEC producers prioritized market share over price support, creating a buffer against short-term shocks.

Summary

Oil prices are heading for a third weekly gain as geopolitical tensions involving Venezuela and Iran lift market sentiment after a weak 2025. While fears of supply disruptions have supported prices in the near term, analysts warn that ample global inventories could cap sustained gains unless production tightens materially.

Frequently Asked Questions (FAQs)

Q1: Why are oil prices rising this week?

Prices are being supported by heightened geopolitical risk, particularly developments in Venezuela and Iran, which have raised concerns about potential supply disruptions.

Q2: What is happening in Venezuela?

A U.S. operation earlier this month reportedly resulted in the capture of Venezuelan President Nicolás Maduro. U.S. officials have said Washington may oversee the sale of some sanctioned Venezuelan crude, adding uncertainty to supply expectations.

Q3: Is the U.S. imposing new tariffs on Russian oil buyers?

Lawmakers are debating tougher sanctions that could penalize countries buying Russian crude, but industry experts say such proposals are still under discussion and may be used primarily as leverage rather than immediate policy.

Q4: Why did oil prices fall sharply in 2025?

Last year saw a significant supply surplus as major producers focused on protecting market share. That oversupply, combined with softer demand growth, pushed prices down despite geopolitical risks.

Q5: Could oil prices keep rising?

Short-term gains are possible if geopolitical tensions escalate, but analysts say abundant inventories and spare production capacity could limit longer-term price increases.