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Oil rises 2% amid supply concerns from Russia, Iraq, and Iran
Oil prices rose on Thursday, January 8, after two days of declines. Prices were supported by a drop in US inventories, as investors assessed developments in Venezuela and concerns about supply from Russia, Iraq, and Iran.
Brent crude futures rose by about 0.6% to $60.32 a barrel, while US crude futures also climbed 0.6% to $56.32 a barrel.
Both benchmark crudes fell by more than 1% for the second consecutive day on Wednesday amid expectations of ample global supplies this year. Morgan Stanley analysts estimate the surplus will reach 3 million barrels per day in the first half of 2026.
A notice from Lloyds List Intelligence and a maritime security source reported that an oil tanker bound for Russia was attacked by a drone in the Black Sea, prompting it to request assistance from the Turkish coast guard and divert its course.
In Iraq, the cabinet approved plans to nationalize operations at the West Qurna 2 oil field, one of the world's largest, to avoid disruptions caused by US sanctions on Russia's Lukoil. Two company officials told Reuters that the state-owned Basra Oil Company would manage the field for 12 months.
In Iran, the government is continuing high-risk subsidy reforms amid widespread protests over the economic crisis. Pavel Molchanov, an investment strategist at Raymond James, warned, "Iran has a long history of protests, and there is no indication that the regime is on the verge of collapse. However, depending on how the situation develops, Iranian oil exports—which represent about 2% of global supply, double that of Venezuela—could be at risk."
Meanwhile, the U.S. Energy Information Administration reported that crude oil inventories in the United States fell by 3.8 million barrels to 419.1 million barrels in the week ending January 2, compared to analysts' expectations in a Reuters poll of a 447,000-barrel increase.
Senior U.S. officials said on Wednesday that Washington needs to control Venezuelan oil sales and revenues indefinitely to stabilize the country's economy, rebuild its oil sector, and ensure it serves U.S. interests.
