The start of the year has brought several reasons for higher prices in commodity markets, including . WTI crude has risen by about $4 per barrel in recent days. This is a noticeable move, but it does not signal panic.
Investors are watching events in the Middle East closely. Anti-government protests in Iran are intensifying, and the situation could worsen if the US decides to step in militarily and support the opposition. Such a move would likely support demand and help oil prices stay above $66 per barrel.
At the same time, attention is also on Venezuela following the removal of President Nicolas Maduro. If the US gains greater control over Venezuela’s oil sector and investment flows resume over the coming years, oil supply could increase. That would add downward pressure on prices.
Will There Be US Military Intervention in Iran?
Protests are continuing across Iran as living conditions worsen due to economic stress and climate-related problems, including in the capital, Tehran. Regardless of how much outside influence is involved, the United States appears keen to use the situation as part of a wider geopolitical strategy by offering military support to the opposition.
This raises the risk of a broader conflict, especially given the interests of Russia and China in the region. As a result, investors are becoming more cautious, which is pushing money toward traditional safe-haven assets such as and , and, for different reasons, crude oil.
Looking ahead, China’s response will be crucial. Beijing is a close ally of Tehran, and after the US intervention in Venezuela, home to the world’s largest proven oil reserves, estimated at around 303 billion barrels, China may seek to prevent further action against another country closely aligned with its interests.
Iran plays an important role in the global oil market. It is the fourth-largest oil producer within OPEC+ and holds a powerful lever in the form of a possible blockade of the Strait of Hormuz. However, such a move appears unlikely, as it would also harm China, one of Iran’s key partners. It is also worth noting that Iran did not take this step during the recent escalation of tensions with Israel.
If the worst-case scenarios are avoided, oil prices may face some short-term pressure. A sharp spike in prices, however, looks unlikely at this stage.
Will WTI Crude Oil Remain Above $60?
Another failed attempt to break below the $55 per barrel support level has led to a period of consolidation, with prices moving within a $55 to $61 range. Buyers are now likely to test the upper end of this range, which looks achievable given rising geopolitical tensions.
If buyers break above this level, the next target sits around $66 per barrel. Key support remains near $55 per barrel.
****
Below are the key ways an InvestingPro subscription can enhance your stock market investing performance:
- ProPicks AI: AI-managed stock picks every month, with several picks that have already taken off in November and in the long term.
- Warren AI: Investing.com’s AI tool provides real-time market insights, advanced chart analysis, and personalized trading data to help traders make quick, data-driven decisions.
- Fair Value: This feature aggregates 17 institutional-grade valuation models to cut through the noise and show you which stocks are overhyped, undervalued, or fairly priced.
1,200+ Financial Metrics at Your Fingertips: From debt ratios and profitability to analyst earnings revisions, you’ll have everything professional investors use to analyze stocks in one clean dashboard.
Institutional-Grade News & Market Insights: Stay ahead of market moves with exclusive headlines and data-driven analysis.
A Distraction-Free Research Experience: No pop-ups. No clutter. No ads. Just streamlined tools built for smart decision-making.
Not a Pro member yet?
Already an InvestingPro user? Then jump straight to the list of picks here.
Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.
