Oil notched its longest streak of weekly gains since June as Iran intensified a crackdown on protests across the country and US President Donald Trump threatened repercussions if demonstrators were targeted.
West Texas Intermediate futures settled near $59 a barrel after rising more than 5% over the prior two sessions. Tehran said that “rioters” who damage public property or clash with security forces will face the death penalty, just a day after the US president warned the country’s regime would “pay hell” if protesters were killed.
The unrest is the most significant challenge to Supreme Leader Ayatollah Ali Khamenei since a nationwide uprising in 2022. Protests are disrupting air travel in and out of the country, which produces more than 3 million barrels a day of crude. The scale of risk shows up clearest in options markets, where the skew toward bullish calls is the biggest for US crude futures since July.
The Iranian turmoil shifted the focus away from Venezuela, where Trump said further attacks were canceled, citing improved cooperation from the country, leading to a brief dip in oil prices earlier. An energy quarantine is still in effect, though, and the US continues to have its military in position for further action in the region after the capture of Venezuelan President Nicolas Maduro last week.
Trump met with oil executives at the White House on Friday and said the US intends to decide which companies will be allowed to go into Venezuela. “We’re dealing with the country, so we’re empowered to make that deal,” he said, adding that “giant” oil companies will spend $100 billion of their own money in investment.
Venezuela’s acting President Delcy Rodriguez, for her part, issued a statement Friday saying the country is a victim of an “illegitimate and illegal criminal aggression” by the US, but was looking to diplomacy and an agenda of “mutual interest.”
Oil futures logged a third weekly advance, though a big surplus this year is expected to put downward pressure on prices in coming months. Goldman Sachs Group Inc. said its clients are the most bearish on oil in 10 years.
“Crude remains caught in a complex dance between heightened geopolitical risk and rising inventory,” said Robert Rennie, the head of commodity research at Westpac Banking Corp.
Higher Venezuela flows and rising output elsewhere could see prices trading in the $50s through the first quarter, he added. Prices slumped 18% last year.
Oil Prices
WTI for February delivery added 2.4% to settle at $59.12 a barrel in New York.
Brent for March settlement rose 2.2% to $63.34 a barrel.
Iran was the focus of oil traders last year when the US bombed the country’s nuclear facilities. At that time oil prices spiked and then subsequently slumped as it became clear that output would not be affected.
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