Oil markets extended modest advances on Monday, buoyed by renewed geopolitical uncertainty between the United States and Iran and by climate-related disruptions to U.S. output. At 0127 GMT Brent crude stood at $66.00 a barrel, up $0.12 or 0.18%. U.S. West Texas Intermediate (WTI) traded at $61.21 a barrel, a rise of $0.14 or 0.23%.
Both benchmarks recorded weekly gains of 2.7% and closed on Friday at their strongest levels since January 14. Market participants are weighing a series of factors that have kept risk premia elevated despite some improvements in logistical capacity elsewhere.
One immediate driver of caution is the expected arrival of a U.S. military aircraft carrier strike group and additional assets in the Middle East in the coming days. On Thursday, U.S. President Donald Trump said the U.S. had an "armada" heading toward Iran but hoped he would not have to use it, while urging Tehran not to kill protesters or restart its nuclear program. On Friday, a senior Iranian official warned Iran would treat any attack "as an all-out war against us."
"President Trump’s declaration of a U.S. armada sailing toward Iran has reignited supply disruption fears, adding a risk premium to crude prices and supported risk aversion flows more broadly this morning," IG market analyst Tony Sycamore said.
In contrast to these geopolitical tensions, Kazakhstan’s Caspian Pipeline Consortium announced its terminal on the Black Sea coast had returned to full loading capacity on Sunday after maintenance was completed on one of its three mooring points. That restoration of capacity removes a short-term logistical constraint at that terminal, though it has not been sufficient to fully ease market caution.
Domestic U.S. factors also contributed to tighter fundamentals. A winter storm that began sweeping across the country on Friday led to declines in crude and natural gas output and produced spikes in spot power prices in affected regions. Analysts at JPMorgan estimated aggregate oil production losses of around 250,000 barrels per day, citing declines in the Bakken, Oklahoma and parts of Texas.
These combined pressures - the possibility of geopolitical escalation in the Middle East and weather-driven production hits in the United States - have underpinned recent price gains even as some logistical bottlenecks have been addressed. Market participants remain attentive to developments on both fronts that could shift the balance between supply and demand.
Market context:
- Brent: $66.00 a barrel at 0127 GMT, up $0.12 (0.18%).
- WTI: $61.21 a barrel, up $0.14 (0.23%).
- Both benchmarks gained 2.7% on the week, closing at their highest since January 14.