Oil prices moved higher on Tuesday as traders focused on mounting political risks in Iran, with fears of supply disruption outweighing expectations of increased crude availability from Venezuela.
Brent crude futures rose by 47 cents, or 0.7%, to $64.34 a barrel by 0735 GMT, remaining close to a two-month high reached earlier in the session.
U.S. West Texas Intermediate crude also advanced, gaining 45 cents, or 0.8%, to trade at $59.95 a barrel as sentiment improved across energy markets.
Market participants have increasingly priced in geopolitical uncertainty linked to Iran, one of the largest oil producers within the Organization of the Petroleum Exporting Countries.
Iran Protests Add Risk Premium To Oil Markets
Political unrest in Iran has intensified in recent days, marking some of the largest anti-government demonstrations the country has experienced in years.
The protests have drawn International attention after reports of lethal force being used against demonstrators, prompting warnings from U.S. President Donald Trump.
Trump cautioned that military action remains a possibility, adding another layer of uncertainty for traders monitoring the region’s oil supply outlook.
ING commodities strategists said the latest price gains reflect growing concern that events in Iran could escalate beyond domestic unrest.
“The price increase comes amid intensifying protests in Iran, raising the possibility of some form of intervention by the U.S.,” the strategists said.
A U.S. official indicated that Trump was expected to meet senior advisers to discuss potential policy options related to Iran.
Sanctions And Trade Tensions Remain In Focus
The situation is especially sensitive because Iran remains heavily sanctioned, meaning any disruption could quickly tighten global supply.
Trump also stated that any country continuing to do Business with Iran would face a 25% tariff on trade conducted with the United States.
Iran exports a significant portion of its oil to China, placing Beijing at the center of potential secondary sanctions.
ING analysts questioned whether Washington would risk reigniting trade tensions with China following a recent trade truce.
“With the U.S. and China having reached a trade truce, we question whether the U.S. would want to rock the boat again with additional tariffs on China,” they said.
Barclays estimated that unrest in Iran has already added a geopolitical premium of around $3 to $4 per barrel to oil prices.
Venezuela Supply Expectations Temper Gains
While geopolitical risks supported prices, traders also weighed the prospect of additional supply entering the market from Venezuela.
Following the removal of President Nicolas Maduro, Trump said the new government could hand over as much as 50 million barrels of oil to the United States.
Those barrels would remain subject to Western sanctions, complicating timelines and logistics for exports.
Global oil trading houses have emerged as early beneficiaries, positioning themselves ahead of major U.S. energy companies in securing Venezuelan crude flows.
This dynamic has limited the upside for prices, even as geopolitical concerns dominate short-term sentiment.
Broader Global Tensions Add Uncertainty
Elsewhere, tensions escalated after Russian forces reportedly launched attacks on Ukraine’s two largest cities.
The developments highlighted the fragile geopolitical backdrop facing global energy markets.
In the United States, renewed criticism of the Federal Reserve by the Trump administration has also unsettled investors.
Concerns about central bank independence and future economic conditions have added uncertainty to oil demand expectations.
Taken together, geopolitical risk, sanctions policy, and supply uncertainty continue to shape price movements across crude markets.