WTI crude oil rose to about $60.35 in early Asian trading on Thursday, driven by worries about possible supply disruptions in Iran. The Energy Information Administration (EIA) reported that U.S. crude inventories increased by 3.391 million barrels, contrary to expectations of a 2.2 million barrel drop.

Impact of Tensions in Iran

Tensions in Iran are affecting oil prices, especially after U.S. President Donald Trump warned of serious action if Iran executes protestors. Changes in the political landscape may impact WTI prices soon. WTI, short for West Texas Intermediate, is a high-quality crude oil due to its low gravity and sulfur content, making it easy to refine. Its price is influenced by global supply and demand, political situations, and decisions by the Organisation of the Petroleum Exporting Countries (OPEC). Reports on oil inventories from the American Petroleum Institute (API) and the EIA can sway WTI prices. Declines in inventory suggest higher demand. OPEC’s decisions, such as cutting production quotas, can also raise prices by limiting supply. Reflecting on early 2025, WTI prices hovered around $60 per barrel due to concerns over civil unrest in Iran and rising U.S. inventories. Today, the scenery has changed with WTI trading just above $78.00. The focus has shifted from protests to the fundamental supply and demand factors supporting prices.

Geopolitical Risks and Market Strategies

The geopolitical risk surrounding Iranian protests has shifted toward uncertainties about stalled nuclear talks. This ongoing tension keeps implied volatility high in longer-dated options, signaling that traders anticipate possible future supply issues. We see this as an opportunity to buy call spreads for potential price increases while managing risk. In contrast to the inventory spike of 3.391 million barrels reported this time last year, the recent EIA data for the week ending January 9, 2026, showed a significant reduction of 4.5 million barrels. Coupled with the International Energy Agency’s recent upward revision of the 2026 global demand forecast to 103.5 million bpd, this indicates a tighter market. Strong demand suggests any price declines may be met with buying interest. In addition, the OPEC+ group, which convened last week, chose to keep its production quotas steady through the first quarter of 2026. This support for stable supply amid growing demand reinforces the current price structure. Historically, OPEC+ adherence to discipline has helped prevent large price drops during the recent economic recovery. Given the circumstances, strategies that take advantage of stable-to-rising prices seem wise in the upcoming weeks. Selling out-of-the-money puts could be an effective way to collect premiums since the combination of tight supply and strong demand creates a solid market foundation. We are monitoring the $72-$74 price range as a crucial support level. Create your live VT Markets account and start trading now.

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