International oil prices declined on Monday. This followed statements from Iran that the situation in the country was "completely under control" after violent incidents over the weekend, alleviating some market concerns about crude supply from this OPEC producer. Simultaneously, investors were assessing developments related to the potential resumption of Venezuela's oil exports. As of 07:50 GMT, Brent crude futures fell 9 cents to $63.25 per barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped 10 cents to $59.02 per barrel. Despite escalating protests over the weekend, Iran's religious leadership intensified its crackdown on the largest demonstrations since 2022. Influenced by this, both major crude benchmarks had gained over 3% last week, marking their largest weekly increase since last October. Iranian Foreign Minister Abbas Araghchi stated through an interpreter on Monday that the domestic situation in Iran was "completely under control" following an escalation of violent clashes over the weekend. He also claimed that remarks from U.S. President Donald Trump, who warned of action against Tehran if protests turned bloody, had incited "terrorists" to target protesters and security forces in an attempt to provoke foreign intervention. The recent unrest in Iran has resulted in more than 500 deaths. A U.S. official revealed that President Trump is expected to meet with senior advisors on Tuesday to discuss potential responses to Iran. Saul Kavonic, Head of Energy Research at MST Marquee, pointed out that although oil prices have recently priced in some risk premium, the market is still underestimating the geopolitical risks from an escalation of the Iran conflict—risks that could affect oil shipments through the Strait of Hormuz. He added, "The market's attitude is not to react significantly until there is an actual disruption in supply." Meanwhile, with the capture of Venezuelan President Nicolás Maduro, the country is expected to resume oil exports soon. President Trump stated last week that the new government in Caracas plans to transfer up to 50 million barrels of sanctioned crude oil to the United States. Four sources familiar with the matter revealed that this news has triggered a scramble among major oil companies for tankers and initiated operational preparations to safely transport crude from Venezuela's tankers and dilapidated ports. At a meeting held at the White House on Friday, Trafigura indicated that its first tanker would begin loading next week. Priyanka Sachdeva, a Senior Market Analyst at Phillip Nova, stated that unless there is a clear rebound in demand or a substantial disruption in supply, oil prices are likely to remain range-bound. She also noted that as the market looks further into 2026, crude futures prices are increasingly reflecting expectations of a supply surplus. Furthermore, investors are closely monitoring the risk of supply disruptions from Russia, as Ukraine continues to attack Russian energy infrastructure, and the United States potentially imposes stricter sanctions on Russia's energy sector.
Comments