Published by Global Banking & Finance Review®
Posted on January 27, 2026
3 min readLast updated: January 27, 2026
Add as preferred source on GoogleOil prices drop as a US winter storm disrupts production, with geopolitical tensions and OPEC+ decisions influencing the market.
By Georgina McCartney
HOUSTON, Jan 27 (Reuters) - Oil prices settled 3% higher on Tuesday as producers reeled from a winter storm that hobbled crude production and drove U.S. Gulf Coast crude exports to zero over the weekend.
Brent crude futures settled up $1.98 or 3.02%, at $67.57 a barrel. U.S. West Texas Intermediate crude settled up $1.76 or 2.9%, at $62.39 a barrel.
U.S. oil producers lost up to 2 million barrels per day or roughly 15% of national production over the weekend, analysts and traders estimated, as a severe winter storm swept across the country, straining energy infrastructure and power grids.
Severe weather has boosted crude futures, with short-term risks tilted to the upside on fears of supply disruptions, said Fawad Razaqzada, market analyst at City Index.
"The cold weather in the U.S. will likely cause quite significant drawdowns in oil stocks over the next few weeks, particularly if this weather persists," said Tamas Varga, an oil analyst at brokerage PVM.
Exports of crude oil and liquefied natural gas from U.S. Gulf Coast ports tumbled to zero on Sunday amid frigid weather, ship tracking service Vortexa said.
Exports rebounded on Monday with flows coming in above seasonal norms as ports reopened, said Samantha Santa Maria-Hartke, head of market analysis at Vortexa.
Kazakhstan's biggest oilfield, Tengiz, is likely to restore less than half of its normal production by February 7 as it slowly recovers from a fire and power outage, two sources familiar with the matter told Reuters.
"The recovery of Tengiz production seems to be happening slower than earlier expected, keeping the oil market tighter," said Giovanni Staunovo, an analyst at UBS, adding that the weaker U.S. dollar was lending some support.
However, the CPC, which operates Kazakhstan's main exporting pipeline, said it returned to full loading capacity at its terminal on the Russian Black Sea coast after maintenance was completed at one of its three mooring points.
SUPPLY RISKS PERSIST DUE TO MIDEAST TENSIONS
A U.S. aircraft carrier and supporting warships have arrived in the Middle East, two U.S. officials told Reuters on Monday, expanding President Donald Trump's capabilities to defend U.S. forces, or potentially take military action against Iran.
"With Trump saying last week that the U.S. has an 'armada' heading towards Iran, geopolitical tensions are rising, and that is keeping oil prices supported in the near-term outlook," said Razaqzada of City Index.
Tensions between Tehran and Washington coupled with no news on the Ukraine-Russia peace deal are keeping a floor under crude, said Dennis Kissler, senior vice president of trading at BOK Financial.
Meanwhile, OPEC+ is set to keep its pause on oil output increases for March at a meeting on February 1, three OPEC+ delegates told Reuters.
(Reporting by Georgina McCartney in Houston, Anna Hirtenstein and Seher Dareen in London. Additional reporting by Jeslyn Lerh in Singapore; Additional reporting by Anushree Mukherjee in Bengaluru; Editing by Bernadette Baum and David Gregorio)
Crude oil is a natural, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. It is extracted from the earth and refined into various fuels and products.
Oil futures are contracts to buy or sell a specific quantity of oil at a predetermined price on a specified future date. They are used by traders to hedge against price fluctuations.
Brent crude is a major trading classification of crude oil originating from the North Sea. It serves as a benchmark for oil prices globally.
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing. It is known for its high quality and low sulfur content.
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