Oil Prices Surge Over $1 Amid Iran Tensions and Supply Risks

Oil prices jumped more than 2% on fears of potential disruptions to Iranian crude exports, outweighing expected increases from Venezuela. Brent crude rose $1.60 to $65.47 per barrel, while WTI climbed $1.65 to $61.15, reflecting growing geopolitical risks. Market analysts cited unrest in Iran, U.S. tariffs on countries doing business with Tehran, and warnings of possible U.S. military action as key factors driving a geopolitical risk premium in oil prices. Attacks on four Greek-managed tankers in the Black Sea added to concerns about supply tightness. Meanwhile, resuming Venezuelan exports after the ousting of President Maduro may add future supply, but short-term market volatility is currently dominated by geopolitical tensions.

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Drone Attacks on Black Sea Tankers Disrupt Kazakh Oil Exports, Insurance Costs Surge

Drones struck two oil tankers in the Black Sea on Tuesday, including a vessel chartered by Chevron, as they sailed toward Russia’s Yuzhnaya Ozereyevka terminal, which handles about 80% of Kazakhstan’s oil exports. The attacks came as Kazakhstan’s oil and gas condensate output fell 35% between January 1 and January 12 versus December averages, largely due to export constraints linked to weather, infrastructure damage and earlier drone strikes on the terminal. The Delta Harmony and Matilda tankers were hit but sustained only minor damage, with no injuries or pollution, while both vessels moved away under their own power. The terminal is part of the 1,500-km CPC system, whose shareholders include KazMunayGas, Lukoil, Chevron and ExxonMobil, and which continues limited exports via one mooring. Following the incidents, war-risk insurance premiums for Black Sea shipping nearly doubled, heightening concerns over a region that handles more than 2% of global crude exports.

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Iran Frees St Nikolas Oil Tanker Amid Rising US-Iran Tensions

Iran released the St Nikolas, an oil tanker seized in January 2024 in retaliation for what Tehran called the U.S. “theft” of Iranian oil, with the vessel now located off the coast of Oman, according to satellite data and its managers, Empire Navigation Inc.. The ship was released on January 9, 2026, and its crew are reportedly in good health, though the vessel’s satellite tracking system is inoperative. The move comes amid escalating U.S. pressure on Iran, with President Donald Trump threatening intervention over Iran’s crackdown on protests that have left at least 2,000 people dead. Trump also announced a 25% tariff on any country conducting business with Tehran, just hours after stating that Iran had reached out for negotiations. The release marks a significant development in the ongoing U.S.-Iran tensions over oil and geopolitical influence in the Persian Gulf.

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Venezuela Restarts Oil Output as US-Supervised Exports Resume

Venezuela’s state oil company PDVSA has started reversing production cuts imposed during a strict U.S. oil embargo as crude exports resume under U.S. supervision, sources said. Output had fallen to about 880,000 bpd last week from 1.16 million bpd in late November, with the Orinoco Belt dropping to 410,000 bpd from 675,000 bpd. The recovery began after two supertankers carrying around 1.8 million barrels each departed Venezuelan waters, potentially marking the first shipments under a proposed 50 million-barrel supply deal with Washington. PDVSA is instructing joint ventures to restart shut wells as storage congestion eases and talks with the U.S. progress. The company is also conducting an internal audit following a cyberattack, while traders Trafigura and Vitol have obtained U.S. licenses to negotiate Venezuelan oil cargoes.

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TotalEnergies and Exxon Signal Venezuela Oil Revival Unlikely to Move Markets Soon

Reviving Venezuela’s oil industry would take years and massive investment, limiting its impact on global markets in 2026, TotalEnergies CEO Patrick Pouyanné said. Venezuela currently produces less than 1 million bpd, far below its historical peak of nearly 4 million bpd, and lifting output above 3 million bpd would require rebuilding dilapidated infrastructure and ensuring legal and security guarantees. Pouyanné said adding 100,000–200,000 bpd could be done relatively easily, but increasing production by 1 million bpd would cost about $100 billion. His comments echoed ExxonMobil CEO Darren Woods, who called Venezuela “uninvestable,” drawing criticism from President Donald Trump, who has urged US firms to return after the removal of Nicolas Maduro. Pouyanné said Venezuela is “not high on my agenda” and doubted it would materially affect oil markets next year.

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WTI Discount to Brent Hits Eight-Month High as Venezuelan Crude Heads to US

The discount of U.S. WTI crude to Brent widened to about $4.76 per barrel, the largest in eight months, as more Venezuelan crude is expected to flow into the U.S. market following the removal of President Nicolás Maduro. Traders estimate up to 50 million barrels of Venezuelan oil could enter the U.S., widening the spread by roughly $1 per barrel and opening export arbitrage opportunities. The WTI–Brent spread widened 21% last week, the biggest weekly move since June 2025, as shipping economics to Europe and Asia improve. U.S. crude exports averaged 3.7 bpd in December and could rise by another 100,000 bpd in the first quarter. Brent prices have strengthened faster than WTI due to geopolitical tensions and expectations of ample U.S. crude supplies.

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Russia’s Energy Tax Oil Benchmark Slumps to Lowest Level Since 2020

The indicative oil price used by Russia to calculate energy taxes fell to its lowest level since May 2020, signaling pressure on state revenues, government data showed. The economy ministry said the benchmark price for December 2025 taxes will be about $39 per barrel, down from $45 in November, based on Russia’s Urals and ESPO crude blends. As a result, Russian state energy revenue fell 22% between January and November 2025 and is set to be the weakest full-year result since 2020. For all of 2025, the average indicative price dropped to $55.60 per barrel, down from $67.90 in 2024 and below the $58 assumed in the budget. Russia’s 2026 budget is based on an average indicative price of $59 per barrel, while the December benchmark will determine taxes paid in January 2026.

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Sinochem’s Quanzhou Refinery Nears Completion of Maintenance, Set to Restart Soon

Sinochem’s Quanzhou Petrochemical refinery in Fujian, China, is nearing the end of a maintenance overhaul and expects to gradually resume operations soon. The 300,000-bpd facility began maintenance on November 25, which lasted nearly two months. Prior to the overhaul, a fire affected the plant’s No. 1 crude distillation unit. The refinery produces gasoline, diesel, jet fuel, and polypropylene, with an ethylene capacity of 1 million metric tons per year. Resuming operations is expected to restore the refinery’s full production capabilities after the prolonged shutdown.

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VLCC Spot Rates and Futures Surge on Geopolitical Tensions and Chartering Activity

VLCC spot rates and futures jumped as charterers booked vessels from Brazil, West Africa, and the Middle East to Asia amid geopolitical uncertainties in Venezuela and Iran. The Baltic Exchange assessed spot earnings at nearly $76,700 per day, up 20.9% from the previous day and almost double the rates before the U.S. intervention in Venezuela on January 3. Major charterers, including Unipec, TotalEnergies, Koch, and IndianOil, secured tonnage at rising rates, with some scrubber-fitted VLCCs earning round-voyage equivalents of $65,900–$74,300 per day, up sharply from $36,800 a week earlier. VLCC futures also rose, with February forward freight contracts up nearly 11% to $20.60 per tonne, and the Breakwave Tanker Shipping ETF surged 14.5% to $29.05. Market analysts noted that while short-term optimism drives rates, a sustained recovery depends on Asian refiners substituting long-haul Middle Eastern crude as overall tonne-mile demand remains constrained.

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Singapore Bunker Fuel Sales Hit Record High in 2025 on Strong Trade and Alternative Fuels

Marine fuel sales in Singapore, the world’s largest bunker hub, rose to a record 56.77 million metric tons in 2025, surpassing 54.92 million tons in 2024, supported by resilient global trade, the Maritime and Port Authority of Singapore (MPA) said. Container throughput also hit a new high of 44.66 million TEUs, while annual vessel arrival tonnage climbed to a record 3.22 billion gross tons. Demand for high-sulphur marine fuel increased for a fifth straight year, contributing to overall bunker growth. At the same time, usage of alternative marine fuels rose to 1.95 million tons in 2025 from 1.35 million tons in 2024, driven by higher uptake of biofuel blends and LNG for emissions reduction. To meet rising LNG demand, the MPA said it will open applications for new LNG bunker supply licences from January 14.