WTI Crude Oil prices rose on Tuesday, closing at $60.80 per barrel. This marks a 2.45% increase, reaching the highest level in two months. The main reason for this rise is the growing geopolitical tensions in the Middle East, especially concerning Iran, which is putting pressure on global oil supplies. The situation in Iran has caught market attention. Domestic unrest and tense relations with the US and Israel have raised concerns about potential disruptions to oil exports. As a significant oil producer, Iran may face sanctions that could have a major impact on the market, particularly with the possibility of a 25% tariff on countries trading with Iran.

Potential Impact Of Venezuelan Oil Exports

At the same time, potential Venezuelan oil exports might help stabilize prices and prevent further increases. Trafigura and Vitol are reportedly getting ready to assist Venezuela, with the first shipment expected soon due to US actions. WTI Oil, known for its low gravity and sulfur content, is produced in the US and highly refined. It serves as a benchmark in the oil market, and its price is affected by global supply and demand, political instability, and OPEC’s production strategies. Weekly inventory reports from API and EIA also influence WTI prices by showing changes in supply and demand. OPEC’s production quotas, influenced by both OPEC and non-OPEC members, are crucial for price changes. Currently, WTI is trading near $88.50 per barrel as of January 14, 2026. Recent tensions in the Strait of Hormuz have added risk to prices, reminding us of previous volatility. However, a surprising inventory increase of 2.1 million barrels reported by the EIA last week is creating strong resistance to further price increases.

Global Demand And OPEC Strategies

A similar situation occurred in 2020 when the market reacted to rising tensions between the US and Iran. Back then, the possibility of Venezuelan oil coming back onto the market effectively capped prices, preventing them from rising above the low $60s. This history shows how geopolitical fears can be offset by actual changes in supply. This time, the counterbalance to instability in the Middle East may not come from Venezuela but from weakening global demand and rumors that OPEC+ might increase production in its next meeting to ease market concerns. This indicates that while immediate risks might lead to quick price spikes, the overall supply and demand landscape may not support prices sustained above $90. The market is therefore set for significant fluctuations. In the upcoming weeks, traders should think about strategies that take advantage of this heightened uncertainty. Options premiums are increasing, making strategies like long straddles on front-month crude futures appealing for those anticipating a major price shift but unsure of the direction. For those already holding long positions, buying puts provides a way to protect against sudden decreases in geopolitical tensions. Create your live VT Markets account and start trading now.

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