Crude Oil Prices Rise as Global Market Weighs Iran, Russia, Venezuela Supply Risks

Emmanuel Addeh in Abuja

Oil prices rose two per cent at the weekend on growing supply worries linked to intensifying protests in oil-producing Iran, an escalation of attacks in Russia’s war in Ukraine as well as issues surrounding the recent capture of the Venezuelan President, Nicolas Maduro.

Nigeria’s benchmark, Brent futures settled $1.35, or 2.18 per cent higher to $63.34 per barrel, while US West Texas Intermediate (WTI) crude was up $1.36, or 2.35 per cent, to $59.12.Earlier, both benchmarks climbed more than three per cent on Thursday, following two straight days of declines. For the week, Brent rose about four per cent, while WTI gained about three per cent.

“The uprising in Iran is keeping the market on edge,” said a Senior Analyst, with the Price Futures Group, Phil Flynn.Worries over potential disruption of Iran’s oil output grew as the civil unrest in the Middle Eastern country intensified.“Iran protests seem to be gathering momentum, leading the market to worry about disruptions,” Head of Commodity Analysis at Saxo Bank, Ole Hansen, said.

A nationwide internet blackout was reported in Iran on Thursday as protests over economic hardships continued in the capital Tehran, the major cities of Mashhad and Isfahan as well as other areas around the country, a Reuters report said.The Organisation of the Petroleum Exporting Countries (OPEC) pumped 28.40 million barrels per day last month, down 100,000 bpd from November’s revised total, a survey showed, with Iran and Venezuela posting the largest declines.

Concerns about the spread of the Russia-Ukraine war also added to supply worries. The Russian military said on Friday it had fired its hypersonic Oreshnik missile at targets in Ukraine. The targets included energy infrastructure supporting Ukraine’s military-industrial complex, the Russian defence ministry said in a statement.Still, global oil inventories are rising, and oversupply remains the main driver that could cap gains, Haitong Futures said. Unless risks around Iran escalate, the rebound is likely limited and hard to sustain.

US President, Donald Trump, has demanded that Venezuela give the US full access to its oil sector following Washington’s capture of the country’s leader Maduro last Saturday. Trump administration officials have said the US will control Venezuelan oil sales and revenue indefinitely.

Chevron, global trading houses Vitol and Trafigura, and other firms are competing for US government deals to market up to 50 million barrels of oil that state-run oil company PDVSA has accumulated in inventories amid a severe oil embargo.

“The market will focus on the outcome in the coming days for how the Venezuelan oil in storage will be sold and delivered,” said Tina Teng, market strategist at Moomoo ANZ.

In Nigeria, crude oil output has been below both the country’s OPEC quota of 1.5 million barrels per day and its budget targets in recent months.