Oil prices climb amid Iranian turmoil and concerns over Russian supply – ING

Oil Prices Climb Amid Rising Global Tensions

Oil prices continued their upward momentum at the start of the week, fueled by intensifying protests in Iran that have heightened concerns about potential supply disruptions. The Iranian government has issued warnings to both the United States and Israel, cautioning them against involvement as the unrest persists. As the fourth-largest member of OPEC, Iran contributes approximately 3.2 million barrels of crude oil per day, which means any instability there poses a significant risk to global oil supplies, according to ING analysts Ewa Manthey and Warren Patterson.

Geopolitical Unrest Drives Market Volatility

At the same time, Ukraine has maintained its campaign against Russian energy assets, with recent attacks targeting three LukOil platforms in the Caspian Sea over the weekend. Ukraine’s strategy has involved striking various segments of Russia’s oil infrastructure, including upstream facilities, pipelines, ports, and refineries. These ongoing assaults, combined with the possibility of the United States tightening sanctions on Russian energy, have increased uncertainty. Senator Lindsey Graham announced that President Trump has endorsed a bill proposing tariffs and secondary sanctions on nations purchasing Russian energy, paving the way for its consideration in Congress. However, with the current administration seeking flexibility in sanction policy during ongoing negotiations, the bill’s passage remains uncertain.

Challenges Facing Venezuelan Oil Investments

ExxonMobil’s CEO recently dismissed prospects for major investments in Venezuela’s oil sector, describing the country as “uninvestable” without substantial reforms. While some industry players have discussed the potential for increasing Venezuelan oil production in the coming years, companies that previously had their assets seized by the Venezuelan government may be reluctant to return unless they receive compensation awarded by international courts. Meanwhile, U.S. Treasury Secretary Scott Bessent indicated that additional sanctions on Venezuela could be lifted as soon as this week to support oil exports.

Speculators Adjust Positions Amid Uncertainty

Recent data reveals that speculative traders trimmed their net long positions in ICE Brent crude by 3,219 contracts last week, bringing the total to 122,965 contracts as of last Tuesday. Both long and short positions increased, reflecting the market’s uncertainty regarding the evolving situation in Venezuela.