Oil prices edged lower on Wednesday after four consecutive sessions of gains, as Venezuela resumed crude exports and rising U.S. oil inventories weighed on sentiment. However, concerns over potential supply disruptions from Iran continued to provide underlying support to the market.
Brent crude futures slipped 0.6% to $65.09 a barrel by 07:20 GMT, while U.S. West Texas Intermediate (WTI) also fell 0.6% to $60.77 a barrel.
According to Suvro Sarkar, an energy analyst at DBS Bank, recent oil prices have already absorbed a significant geopolitical risk premium amid escalating unrest in Iran, alongside drone-related tensions in the Black Sea region. He added that unless the situation deteriorates further into actual supply interruptions, prices may stabilize near current levels.
Sarkar also pointed to rising U.S. crude and fuel inventories as an additional drag on prices. Data from the American Petroleum Institute showed that U.S. crude stockpiles increased by 5.23 million barrels in the week ended January 9. Gasoline inventories rose by 8.23 million barrels, while distillate stocks climbed by 4.34 million barrels.
Official inventory figures from the Energy Information Administration are due later on Wednesday. A Reuters survey earlier this week suggested that while crude inventories may have declined, gasoline and distillate stockpiles were expected to rise.
Venezuela supply returns to the market
Adding further pressure, OPEC member Venezuela has started rolling back oil production cuts imposed during the U.S. embargo, with exports resuming, according to sources familiar with the matter.
Two supertankers reportedly left Venezuelan waters on Monday, each carrying roughly 1.8 million barrels of crude. The shipments are believed to mark the first deliveries under a proposed 50-million-barrel supply agreement between Caracas and Washington, following the U.S. capture of Venezuelan leader Nicolás Maduro.
Iran unrest keeps geopolitical risks elevated
Despite the renewed Venezuelan supply, unrest in Iran, the fourth-largest oil producer within OPEC, continues to raise concerns about potential disruptions. Donald Trump on Tuesday encouraged Iranian protesters to sustain pressure on the government, stating that support was forthcoming without providing further details.
Analysts at Citi noted that while protests in Iran have so far not spread to key oil-producing regions, they still pose a risk by increasing geopolitical uncertainty. Citi raised its three-month outlook for Brent crude to $70 a barrel, citing the possibility of tighter global oil balances driven by political and logistical challenges rather than immediate production outages.
The bank added that current risks remain tilted toward disruptions in transport and diplomacy, keeping the direct impact on Iranian oil exports relatively contained for now.
