Oil Prices Jump on Iran Unrest and Russia War Fears as Venezuela Supply Talks Loom

Oil prices rose about 2% as markets priced in higher geopolitical supply risks, with Brent settling at $63.34 a barrel and WTI at $59.12, marking weekly gains of roughly 4% and 3% respectively. Intensifying protests across Iran, including a reported nationwide internet blackout, raised concerns about potential disruptions to Iranian output, while Russia’s use of hypersonic missiles against Ukrainian energy-linked targets added to supply anxieties. OPEC output slipped to 28.40 million bpd last month, down 100,000 bpd, with Iran and Venezuela posting the largest declines. Attention is also turning to Venezuela, where the White House is in talks with oil majors and traders over how to market up to 50 million barrels of accumulated crude after the capture of President Nicolas Maduro. Analysts caution that rising global inventories and ongoing oversupply could cap further price gains unless geopolitical tensions escalate significantly.

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Iran Protests Raise Fears of Regime Change With Global Energy and Security Stakes

Iran is facing its most serious unrest since the 1979 revolution, with protests spreading nationwide, more than 500 people reportedly killed, over 10,000 arrested, and crowds in the hundreds of thousands defying a harsh crackdown driven by economic collapse and political repression. The turmoil has drawn encouragement and threats from U.S. President Donald Trump, while investors reacted as Brent crude jumped over 5% to above $63 a barrel amid fears of disruptions in OPEC’s fourth-largest producer. Analysts say the regime of Supreme Leader Ayatollah Ali Khamenei is weakened by inflation, sanctions and recent Israeli strikes, but still retains the loyalty of powerful security forces, especially the IRGC. Regional leaders worry that a collapse could unleash chaos, destabilize neighbors and threaten oil infrastructure, while Russia would lose another key ally if Tehran falls. Most experts judge a full revolution as still unlikely in the near term, with more probable outcomes including intensified repression, leadership reshuffling, or a military-backed power shift rather than a clean overthrow.

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Venezuela Claims Joint Operation With US as Seized Tanker Returns Home

Venezuela’s state oil company PDVSA said a tanker seized by the US — the 114,800-dwt Aframax Olina (built 2005), formerly known as Minerva M— is returning to Venezuelan waters as part of what it described as a “joint operation” with Washington. The vessel was the fifth tanker seized by the US in the Venezuelan crude trade and the third in three days, amid a US blockade targeting sanctioned oil shipments. PDVSA said the ship had left Venezuelan waters without authorization and is now returning for protection and further action, framing the move as a potential start of cooperation with the US. However, the US Defense Department has not confirmed a formal joint operation, while US Southern Command described the seizure as a “joint interagency operation.” US officials said the blockade remains in effect, noting that at least seven shadow-fleet tankers have recently turned back to avoid interception.

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Vitol, Trafigura Begin Naphtha and Crude Flows to Restart Venezuelan Oil Exports

Commodities trader Vitol is set to load its first naphtha cargo of about 460,000 barrels from Houston to Venezuela this weekend, marking a key step in reviving the country’s heavy crude production after months of disruption. The diluent shipment follows agreements by Vitol and Trafigura with the U.S. government to help market Venezuelan oil after Caracas agreed to export up to 50 million barrels of crude to the United States. PDVSA had recently cut output after a U.S. naval blockade forced it to store oil on ships, making diluent supplies critical to restarting flows. Trafigura said it will load its first vessel of Venezuelan crude to the U.S. next week, while Vitol has secured a preliminary license to handle Venezuelan oil imports and exports. Analysts said U.S. naphtha is likely to replace Russian diluent supplies to Venezuela, keeping total diluent imports broadly steady but shifting market share back to the U.S.

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Trump’s Venezuela Oil Push Threatens U.S. Shale as Prices Sink

President Donald Trump is urging U.S. oil companies to revive Venezuela’s oil industry and channel 30–50 million barrels of crude to the U.S., a move that risks deepening oversupply and squeezing domestic producers already hurt by low prices. U.S. crude settled near $59 per barrel, below the roughly $65 many producers need to break even, as layoffs and spending cuts spread across majors and service firms. U.S. production hit a record 13.61 million bpd in 2025 but is forecast to fall to 13.53 million bpd in 2026, with analysts warning additional heavy Venezuelan barrels could pin WTI near $50 and cut output by about 150,000 bpd by 2026. Exxon said Venezuela remains “uninvestable” without legal reforms despite studying a return, while Chevron said it could immediately double liftings and raise production 50% within 18–24 months. While refiners could benefit from the influx, shale executives warn Trump’s bid to lower fuel prices may undermine U.S. drilling, margins and long-term output.

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India’s Reliance in Talks With U.S. for Permit to Resume Venezuelan Oil Purchases

India’s Reliance Industries is in discussions with the U.S. State and Treasury Departments to obtain approval to resume buying Venezuelan crude oil after U.S. sanctions halted most imports, sources said. The company previously imported around 63,000 bpd in early 2025 under U.S. licences before they were suspended amid Washington’s pressure on buyers of Russian oil. Reliance’s last shipment of Venezuelan crude arrived in May 2025, and it has said it would consider restarting purchases if sales to non-U.S. buyers are permitted under U.S. regulations. Other refiners may also pursue Venezuelan oil if regulatory clarity is provided, potentially helping India diversify away from Russian supplies.

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Ukraine Hits Russian Oil Platforms and Air Defenses in Escalating Energy War

Ukraine said it struck three Lukoil-owned oil drilling platforms in the Caspian Sea — Filanovsky, Yuri Korchagin and Valery Grayfe — as part of efforts to weaken Russia’s ability to finance its war, with damage still being assessed after multiple hits. Kyiv also reported destroying a Buk-M3 air defense launcher in Russian-controlled Luhansk and striking a logistics warehouse in Kherson to disrupt military supply lines. The attacks reflect Ukraine’s broader campaign against Russian energy assets, including refineries, ports and tankers, aimed at cutting oil revenues critical to Moscow’s war effort. Russia has similarly targeted Ukraine’s energy infrastructure, causing widespread power and heating outages. Separately, Russian officials said a Ukrainian drone attack on Voronezh killed one person and wounded at least four, with 17 drones intercepted in one of the city’s largest attacks since the war began.

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Saudi Cuts February Crude Supply to China amid Beijing’s Expanded Import Quotas

Saudi Arabia is set to reduce crude oil shipments to China in February to 47.5–49 million barrels, down from 49.5 million barrels in January, despite higher liftings by Sinopec and Sinochem, as allocations to PetroChina and Rongsheng decline. The cut follows Saudi Arabia’s third consecutive monthly reduction in official selling prices for Asia, signaling softer regional demand. Separately, China has issued 2026 crude import quotas to three former Sinochem-owned Shandong refineries now run by independent operators, totaling about 12 million metric tons per year (240,000 bpd). The move allows these refiners to buy crude directly on the market rather than through Sinochem, increasing their purchasing autonomy. Overall, the developments point to a more competitive and price-sensitive Asian crude market, with Saudi supply tightening even as China broadens access for independent buyers.

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Iraq Lowers Asia Crude Prices as West Qurna 2 Nationalisation Lifts VLCC Outlook

Iraq cut the February official selling price of Basrah Medium crude to Asia to a discount of $1.30 per barrel versus the regional benchmark, from $1.05 in January, while keeping Basrah Heavy unchanged at a $3.60 discount. Separately, Baghdad approved plans to nationalise Lukoil-controlled West Qurna 2, with state-run Basra Oil Co set to operate the field for 12 months as Iraq seeks a Western buyer amid U.S. sanctions on the Russian firm. Lukoil owns 75% of the field, which produces about 465,000–480,000 bpd, roughly 0.5% of global output, after declaring force majeure in November when payments were halted. The move could revive crude loadings and boost VLCC demand after Somo cancelled three November tanker shipments, denting Middle East volumes. Clarksons Securities said VLCC eco earnings have rebounded 9% to $49,200 per day and could approach $80,000 per day in February as sentiment improves.

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Asia Fuel Oil Premiums Hit Eight-Month High as Venezuelan Barrels Shift to U.S.

Asia’s high-sulphur fuel oil (HSFO) premium over Western markets surged to its highest level in eight months as traders expect more Venezuelan crude and fuel oil to be diverted to the United States, reducing supplies to Asia. The East-West 380-cst HSFO swap spread jumped above $27 a barrel, more than doubling since the start of 2026, according to LSEG data. U.S. plans to take control of Venezuelan oil flows and refine up to 50 million barrels have turned the U.S. Gulf Coast market bearish while tightening availability for Asia. The uncertainty has increased volatility in Singapore’s HSFO forward spreads, which have swung between backwardation and contango. While ample inventories are limiting immediate price gains, analysts warn Asian refiners—especially Chinese independents—could face margin pressure without cheap Venezuelan feedstock.