LONDON, Jan 29, 2026, 11:41 GMT — Regular session
Oil prices surged Thursday, lifting Brent crude above the $70 mark amid growing fears of a possible U.S. strike on Iran. By 1011 GMT, Brent futures climbed $1.39, or 2.0%, to $69.79 after touching $70.35 earlier. Meanwhile, U.S. West Texas Intermediate added $1.37, or 2.2%, reaching $64.58. 1
The push isn’t really about demand figures but the geopolitical risk premium — that extra cost buyers accept in case supplies get cut off. John Evans, an analyst at PVM, pointed to the main worry: “The immediate concern is… it closes the Strait of Hormuz.” 2
U.S. President Donald Trump has intensified pressure on Tehran, considering targeted strikes against Iranian security forces and leaders, according to sources speaking to Reuters. A U.S. aircraft carrier, along with escorting warships, has been deployed to the region, broadening Washington’s military options. 3
Supply concerns remain after a U.S. winter storm knocked crude production down by an estimated 2 million barrels per day over the weekend, according to analysts and traders. “The cold weather… will likely cause quite significant drawdowns in oil stocks over the next few weeks,” said Tamas Varga from brokerage PVM. 4
U.S. inventory figures boosted buying. Commercial crude supplies dropped 2.3 million barrels to 423.8 million in the week ending Jan. 23, roughly 3% under the five-year average, the Energy Information Administration reported. 5
Brent rose 83 cents to settle at $68.40 on Wednesday, while WTI gained 82 cents, closing at $63.21. Both contracts are set for their largest monthly percentage jumps since July 2023, with Brent up roughly 12% and WTI about 10% this month. The Federal Reserve held interest rates steady, keeping the fed funds target range at 3.5% to 3.75%. 6
Citi said the Iran risk has already pushed prices up by about $3 to $4 a barrel and warned that any further escalation could keep crude prices elevated despite lingering oversupply concerns. The bank noted, “Further geopolitical escalation can lift prices to our 0-3m target of $70 a barrel,” adding a bullish Brent forecast of $72 over the next three months. 7
But the physical market is showing signs of weakening. Saudi Arabia is likely to price its March official selling price for Arab Light to Asia at a 20 to 55 cent discount to the Oman/Dubai benchmark, according to trade sources. This comes as Dubai crude moves into contango, with futures for later delivery trading above prompt cargoes. 8
Traders are eyeing Sunday’s OPEC+ meeting — that’s OPEC plus allies like Russia — for clues on March production levels. They’re also watching the Feb. 1 Russia-Ukraine-U.S. talks in Abu Dhabi. Expect Middle East headlines to drive the market’s daily moves. 9
