NEW YORK, Jan 12, 2026, 07:44 EST — Premarket
- Brent slipped 0.5% to around $63 a barrel as traders reacted to Iran’s claim that the unrest was “under total control,” dampening risk appetite.
- A rights group reported that deaths in Iran’s protests have passed 500. President Donald Trump is set to meet advisers Tuesday to discuss options on Iran.
- Markets are focused on any disruptions to Iranian exports and shipping via the Strait of Hormuz, while barrels from Venezuela appear poised to make a comeback.
Oil prices slipped on Monday as traders balanced Iran’s efforts to calm tensions after days of unrest against a market flush with supply. By 10:45 GMT, Brent crude futures dropped 31 cents, or 0.5%, to $63.03 a barrel. U.S. West Texas Intermediate lost 36 cents, or 0.6%, settling at $58.76. “Lower European equity markets and the absence of fresh supply disruptions are putting moderate pressure on oil prices, after last week’s strong rally,” said UBS analyst Giovanni Staunovo. 1
Risk is priced in, but it’s not shouting. Saul Kavonic, MST Marquee’s head of energy research, argued the market still undervalues the odds of a broader Iran conflict disrupting shipments through the Strait of Hormuz. “The market is saying, ‘Show me the disruption to supply’ before it really reacts,” he noted. On the other hand, Priyanka Sachdeva from Phillip Nova pointed out that futures are increasingly pricing in an oversupply scenario as 2026 approaches. 2
Iran’s foreign ministry confirmed ongoing communications with Washington while the White House considers its next move. A spokesperson said messages were exchanged between Foreign Minister Abbas Araqchi and U.S. special envoy Steve Witkoff, with Switzerland also facilitating contacts. HRANA, a U.S.-based rights group, reported verifying 490 protesters and 48 security personnel deaths, plus over 10,600 arrests since protests began on Dec. 28. Reuters could not independently confirm these figures, and Iran has not released an official death toll. A U.S. official told Reuters that Trump plans to meet senior advisers Tuesday to review options, following his threat of possible military action if the crackdown on protesters intensifies. 3
Oil traders often refer to the risk simply as “Hormuz.” This narrow passage between Iran and Oman connects the Gulf to the Arabian Sea, serving as a critical energy bottleneck. According to the U.S. Energy Information Administration, about 20 million barrels of oil per day passed through the strait in 2024—around 20% of the world’s petroleum liquids consumption. Disruptions here would leave few alternatives. 4
News from Venezuela is turning the tables, easing the Iran premium. Vitol and Trafigura jumped in early as U.S. moves in Caracas unfolded. Washington and Caracas have sealed a deal to sell up to 50 million barrels of crude to U.S. refiners and others, Reuters reported. Trafigura CEO Richard Holtum told a White House meeting the firm expects to load its first cargo this week, following the traders’ receipt of preliminary special licenses. 5
The macro drag remains intact. Goldman Sachs projects oil prices slipping in 2026, driven by a supply surge that will push a 2.3 million barrels-per-day surplus. It forecasts Brent averaging $56 a barrel and WTI at $52. The bank sees prices hitting a low of $54 for Brent and $50 for WTI in Q4 as OECD inventories build up. To play this supply glut, Goldman suggests shorting the Brent “time-spread” — the difference between near and deferred contracts. 6
Iran’s oil barrels faced pressure even before the protests erupted. A Reuters survey showed OPEC output slipped in December, driven by declines in Iran and Venezuela. Iranian supply dropped by 100,000 barrels per day, the survey noted, pointing to fresh U.S. sanctions rolled out in December targeting exports linked to Tehran’s nuclear program. 7
The tape splits between two narratives. First, an urgent and clear-cut scenario: Iran unrest escalating into outages, strikes, or shipping disruptions. Second, a slower, weightier outlook—a 2026 market leaning toward excess supply unless demand jumps unexpectedly.
The Iran bid could vanish quickly if the market spots no export disruptions, no ripple effects in the Gulf, and no policy moves from Washington beyond talk. Conversely, any hiccup in Iranian shipments or a spike in insurance and freight costs through Hormuz would immediately pressure prompt prices and push the front end of the crude curve higher.
Traders eye Tuesday’s White House meeting on Iran options closely, looking for any hints that unrest might be hitting energy infrastructure or export routes, just as the initial Venezuelan cargoes prepare to ship out.
