Finance
Oil prices surge 3% to five-month high on worries US could attack Iran
Published by Global Banking & Finance Review®
Posted on January 29, 2026
4 min readLast updated: January 29, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 29, 2026
4 min readLast updated: January 29, 2026
Oil prices rose for the third day due to U.S. threats against Iran, with Brent and WTI reaching new highs. Declining U.S. crude inventories also supported prices.
By Scott DiSavino
NEW YORK, Jan 29 (Reuters) - Oil prices climbed 3% to a five-month high on Thursday on rising concerns that global supplies could be disrupted if the U.S. attacks Iran, one of OPEC's biggest crude producers.
Brent futures rose $2.31, or 3.4%, to settle at $70.71 a barrel, while U.S. West Texas Intermediate gained $2.21, or 3.5%, to settle at $65.42.
That pushed both crude benchmarks into technically overbought territory with Brent closing at its highest since July 31 and WTI closing at its highest since September 26.
U.S. President Donald Trump is weighing options against Iran that include targeted strikes on security forces and leaders to inspire protesters, multiple sources said, even as Israeli and Arab officials said air power alone would not topple Tehran's clerical rulers.
In Iran, plainclothes security forces have rounded up thousands of people in a campaign of mass arrests and intimidation to deter further protests.
Two U.S. sources familiar with the discussions said Trump wanted to create conditions for "regime change" after a crackdown crushed a nationwide protest movement earlier this month, killing thousands of people.
"The immediate (market) concern ... is the collateral damage done if Iran takes a swing at its neighbors or possibly even more tellingly, it closes the Strait of Hormuz to the 20 million barrels per day of oil that navigates it," said PVM analyst John Evans.
Iran was the third-biggest crude producer in the Organization of the Petroleum Exporting Countries behind Saudi Arabia and Iraq in 2025, according to U.S. Energy Information Administration data.
European Union foreign ministers adopted new sanctions on Iran on Thursday targeting individuals and entities involved in a violent crackdown on protesters. Separately, the EU designated Iran's Revolutionary Guard as a terrorist organization.
"The potential for Iran getting hit has escalated the geopolitical premium of oil prices," Citi analysts said in a note.
RUSSIA, KAZAKHSTAN AND VENEZUELA:
The Kremlin said on Thursday that Russia had reiterated its invitation for Ukrainian President Volodymyr Zelenskiy to come to Moscow for peace talks, as U.S.-led efforts to reach a deal to end the nearly four-year war in Ukraine intensify.
Any peace deal that would allow Russia to export more oil should increase global supplies and decrease energy prices. Russia is the third-biggest crude producer in the world after the U.S. and Saudi Arabia, according to EIA data.
U.S. private equity firm Carlyle Group has agreed to an initial deal to buy most of Lukoil's foreign assets, which Russia's second-largest oil company is being forced to sell because of U.S. sanctions.
In other news that could boost global supplies and reduce prices, Kazakhstan said U.S. oil major Chevron would take measures to ensure the reliable and safe operation of facilities at Kazakhstan's giant Tengiz oilfield, with the aim of reaching full production in a week.
"Disruptions in Kazakhstan (CPC terminal, Tengiz field force majeure) have removed a significant number of barrels from the market," UBS analyst Giovanni Staunovo said.
Regarding Venezuela, Exxon Mobil and Chevron executives may face more questions about their investment opportunities in Venezuela than their actual quarterly earnings when they hold calls with analysts on Friday.
In the U.S., crude production continued to recover on Thursday after a winter storm ravaged production and losses peaked at 2 million bpd over the weekend.
DOLLAR REMAINS UNDER PRESSURE
The U.S. dollar held near its lowest since February 2022 against a basket of other currencies on uncertainty over U.S. economic policies.
A weaker U.S. dollar can boost oil prices by making dollar-priced oil less expensive for many global buyers.
The U.S. Federal Reserve struck a more sanguine tone on the U.S. labor market and inflation risks overnight, which investors took to imply that interest rates could be on hold for longer.
Lower interest rates would reduce consumer borrowing costs and could boost economic growth and oil demand.
Trump, who wants the Fed to lower interest rates, said he intends to announce his pick to replace Chair Jerome Powell next week.
Analysts noted the premium of futures for Brent over WTI rose to $5.30 per barrel, its highest since April 2024.
Analysts have said that when Brent's premium over WTI rises over $4 a barrel, it generally makes economic sense for energy firms to send ships across the ocean to pick up U.S. crude, which should result in higher U.S. exports.
(Reporting by Scott DiSavino in New York and Robert Harvey in London, Sam Li and Trixie Yap in Singapore; Additional reporting by Ahmad Ghaddar and Enes Tunagur in London; Editing by Emelia Sithole-Matarise, Kirsten Donovan, Rod Nickel)
Crude oil is a natural, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. It is extracted from the ground and refined into various petroleum products, including gasoline, diesel, and jet fuel.
Brent crude is a major trading classification of crude oil originating from the North Sea. It serves as a benchmark for oil prices globally and is used to price two-thirds of the world's internationally traded crude oil supplies.
U.S. crude inventories refer to the stock of crude oil held in storage facilities across the United States. These inventories are monitored as they can indicate supply and demand trends in the oil market.
Explore more articles in the Finance category
