(Investing) – Oil prices rose further Tuesday, gaining for a fourth consecutive session on elevated supply disruption risks following significant anti-government protests in Iran.
At 08:05 ET (13:05 GMT), Brent Oil Futures expiring in March rose 2% to $65.15 per barrel, and West Texas Intermediate (WTI) crude futures gained 2.4% to $60.75 per barrel.
Brent contract reached over a seven-week high in the previous session, while the WTI benchmark rose to a one-month high.
Iran unrest fuels supply fear premium
Iran, a key OPEC producer, is facing its biggest anti-government demonstrations in years, with widespread violence and reported heavy casualties as security forces crack down on protesters.
U.S. President Donald Trump has warned of possible military action if Iranian authorities continue to use lethal force against demonstrators.
Trump also announced plans to impose a 25 % tariff on any country “doing business” with Iran, a move aimed at isolating Tehran economically.
“China is a key buyer of Iranian oil. Whether this secondary tariff threat is sufficient to push China away from Iranian oil remains to be seen,” ING analysts said in a research note.
A Reuters report said Trump is expected to meet senior advisers on Tuesday to discuss options on Iran.
“We expect them [the demonstrations] to escalate much further for two reasons,” BCA added, as “the regime lost credibility with the public over the past decade, and the opposition political forces have a once-in-a-generation opportunity to gain access to government during the looming leadership succession from Supreme Leader Ali Khamenei.”
“The risk to Iran’s regime survival raises the probability of a massive global oil supply shock back to around 40%, where we put it last year,” said BCA Research.
Russia’s CPC terminal supply under pressure
Supply risks were not limited to the Middle East. Russia’s oil export infrastructure has come under repeated attack amid the prolonged Ukraine conflict.
Ukrainian forces have struck at Russian oil facilities and export hubs, including the Caspian Pipeline Consortium (CPC) terminal near Novorossiysk.
Two oil tankers were attacked near the Black Sea loading terminal, Bloomberg news reported on Tuesday, citing people familiar with the matter.
Exports of Kazakh oil from the CPC terminal will come under significant pressure this month. Shipments are expected to come in between 800-900k b/d, around 45% below initial expectations, according to Bloomberg.
Venezuela prepares to re-enter export markets
Meanwhile, another OPEC producer, Venezuela, is preparing to resume oil exports after a period of disruption.
Following political shifts in Venezuela and the capture of President Nicolas Maduro, Trump said last week that Caracas would hand over up to 50 million barrels of oil to the U.S., a move that could eventually add barrels back into the global market.
Trump has urged American energy firms to invest $100 billion to rebuild Venezuela’s oil industry.
Exxon Mobil Corp (NYSE:XOM), ConocoPhillips (NYSE:COP) and Chevron (NYSE:CVX) were key partners of Venezuela’s state oil company, PDVSA, before former President Hugo Chavez nationalized the industry between 2004 and 2007.
