Oil prices moved cautiously on January 12, 2026, as traders balanced two opposing forces: rising Iran supply risk and the prospect of Venezuelan barrels returning.
Oil prices: what the market is reacting to
Oil prices in early Asian trade nudged higher, with Brent around $63.39 a barrel and WTI around $59.16.
The move looked small, but the drivers were large. Investors priced in a geopolitical risk premium tied to Iran. At the same time, they capped gains because Venezuela may restart exports fast.
Reuters noted that traders were still waiting for “tangible supply disruptions” before pushing oil prices higher.
Iran unrest adds a tail risk to oil prices
Iran’s protests have turned into a supply-risk story for oil prices. Reuters reported protest deaths above 500, citing HRANA, while noting Reuters could not independently verify the tally.
The same Reuters oil report flagged calls for Iranian oil workers to strike. That matters because strikes can shift risk from “headline noise” to “lost barrels.”
Markets also watch the Strait of Hormuz as the biggest choke point. The U.S. Energy Information Administration said flows through the strait averaged about 20 million barrels per day in 2024, roughly 20% of global petroleum liquids consumption.
That math explains the asymmetry in oil prices. Even without an actual shutdown, the probability of disruption can lift prompt prices and volatility.
Venezuela return limits upside for oil prices
On the other side of the ledger, Venezuela is expected to resume oil exports soon after the ouster of President Nicolás Maduro, Reuters reported.
The U.S. and Venezuela also reached a deal to export up to about $2 billion worth of crude to the United States, Reuters reported. Trump said the agreed supply volume was 30–50 million barrels.
Operationally, the restart is moving beyond talk. Reuters reported that Trafigura told a White House meeting its first vessel should load in the next week.
This helps explain why oil prices stayed range-bound. Iran raises the downside risk for supply. Venezuela raises the upside risk for supply. Those forces can cancel each other until something breaks.
Oversupply narrative keeps oil prices anchored
Even with geopolitical headlines, many desks still frame 2026 as a surplus year. Goldman Sachs forecast lower average oil prices in 2026, driven by swelling supply and a market surplus.
That view also shows up in OPEC data signals. A Reuters survey found OPEC output fell in December 2025, with declines linked to Iran and Venezuela. The survey highlights how sanctions and politics can change realized supply.
For oil prices, the key question is timing. If Venezuela ramps faster than expected, the surplus story strengthens. If Iran faces real export disruption, the surplus can shrink quickly.
What to watch next for oil prices
Three near-term signals should shape oil prices.
1) Evidence of physical disruption
Traders keep repeating the same filter: show the disruption. Watch for export slowdowns, shipping delays, or confirmed outages tied to Iran.
2) Venezuela loading cadence
If promised cargoes load on schedule, the market will treat Venezuelan supply as real. The Trafigura timing and the U.S.–Venezuela deal terms make this the main “cap” on oil prices for now.
3) Hormuz risk premium
A higher risk premium can lift oil prices even without a shutdown. The EIA’s chokepoint figures explain why the strait remains central to global pricing.