The price of West Texas Intermediate (WTI) crude oil rose to nearly $59.20 during early Asian trading. This increase is fueled by worries that protests in Iran could disrupt oil supply. If this happens, almost 2 million barrels per day of Iranian oil exports could be at risk. The US is looking at military options in Iran, which could further affect oil prices. At the same time, the US plans to bring Venezuelan oil back into the global market, with up to 50 million barrels ready for export. These efforts come after US forces arrested Nicolas Maduro.

Market Impacts and Influences

Traders are waiting for the American Petroleum Institute’s (API) report on US crude oil stockpiles, set to be released on Tuesday. If the inventory shows a bigger drop than expected, it could indicate strong demand and push WTI prices up. On the other hand, if inventory increases, it might signal weaker demand. WTI is a key type of crude oil from the US and serves as an important benchmark for oil markets. Its price is affected by supply, demand, geopolitical events, and OPEC’s production choices. Reports on oil inventories from API and the Energy Information Administration (EIA) also play a role, with the EIA’s data being seen as more reliable. OPEC’s decisions on production limits can greatly influence supply and prices, and OPEC+ includes countries like Russia to extend its reach. Looking back to early 2025, unrest in Iran briefly pushed WTI crude near $60 a barrel. Currently, the market is tighter, with prices around $84.50 as of January 12, 2026. This indicates a more persistent supply shortage compared to last year’s temporary geopolitical concerns.

OPEC+ and Market Discipline

The market’s strength today isn’t just due to political risks but also the steady production discipline from OPEC+. The group is making voluntary cuts of 2.2 million barrels per day, helping to keep prices stable. Unlike in 2025, when the possibility of more supply from places like Venezuela was debated, the focus now is on careful supply management. On the demand side, fears of a global recession that existed in 2025 have faded. Instead, we see strong consumption trends. According to the IEA’s latest report, global oil demand is expected to grow by 1.3 million barrels per day in 2026, mainly driven by strong demand from Asian economies. This steady demand amidst limited supply creates a supportive environment for prices. Due to these dynamics, it’s crucial to closely monitor weekly EIA and API inventory data. In a tight market, a surprising drop in inventory can significantly affect prices. For example, two weeks ago, a 3.5 million barrel drop caused WTI to rise by 2% in just one session. These reports are now key drivers of short-term price swings. In the upcoming weeks, we should think about option strategies that can leverage this underlying strength and potential volatility. Buying call options or creating bull call spreads can help gain exposure to any supply shocks while managing risk. With the market being very responsive to news, selling out-of-the-money puts may also be a good strategy to earn premium, based on the strong support for prices. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now