Oil prices continued their upward trajectory on Monday as escalating civil unrest in Iran heightened concerns about potential supply disruptions from one of OPEC's key producers. The market volatility reflects growing geopolitical tensions that could significantly impact global energy supplies.

Current Price Movements

The latest trading session showed sustained momentum in crude oil markets:

Both contracts demonstrated strong weekly performance, rising more than 3% to secure their biggest weekly gains since October. The price increases occurred by 0006 GMT on Monday, continuing the bullish trend established in the previous trading week.

Iran Crisis Escalates Supply Concerns

The intensifying protests in Iran have created significant market anxiety about potential oil supply disruptions. Iran's clerical establishment has escalated its crackdown on the largest demonstrations witnessed since 2022, with the civil unrest resulting in more than 500 deaths according to rights groups.

U.S. President Trump has issued repeated warnings about potential intervention if force continues to be used against protesters. A U.S. official confirmed that the president is scheduled to meet with senior advisers on Tuesday to discuss various options regarding Iran.

ANZ analysts, led by Daniel Hynes, highlighted the severity of the situation in their market note: "There have also been calls for workers in the oil india industry to down tools amid the protests. The situation puts at least 1.9 million barrels per day of oil exports at risk of disruption."

Venezuela Developments Limit Price Gains

While Iranian supply concerns drive prices higher, developments in Venezuela are providing a counterbalancing effect on market sentiment. Following the ouster of President Nicolas Maduro, Venezuela is expected to resume oil exports in the near term.

Trump announced last week that the government in Caracas is prepared to transfer up to 50 million barrels of sanctioned oil to the United States. This development has triggered intense activity among oil companies as they scramble to secure tankers and establish operational frameworks for safely shipping crude from Venezuelan vessels and ports.

Industry Response and Logistics

The anticipated resumption of Venezuelan oil exports has sparked a competitive race among energy companies to position themselves for the opportunity. Four sources familiar with the operations confirmed that companies are actively working to assemble the necessary infrastructure and logistics capabilities.

Trafigura, a major commodity trading company, provided an update during a White House meeting on Friday, indicating that their first vessel should begin loading operations within the next week. This timeline suggests that Venezuelan oil could return to international markets relatively quickly, potentially offsetting some of the supply concerns related to Iran.

Market Outlook

The current oil market dynamics reflect the complex interplay between geopolitical risks and supply adjustments. While Iranian supply disruptions pose a significant threat to global oil availability, the potential return of Venezuelan crude provides a stabilizing factor that is preventing more dramatic price increases. Market participants continue to monitor both situations closely as they assess the overall impact on global energy supplies.

Oil prices extended their rally for the third consecutive day as escalating protests in Iran raised concerns about potential supply disruptions from one of OPEC's key producers. The geopolitical tensions in the Middle East region have prompted investors to reassess supply risk scenarios, leading to increased buying activity in crude oil markets.

Price Movement and Market Response

Brent crude oil, the international benchmark, climbed to $63.89 per barrel, while West Texas Intermediate (WTI), the US benchmark, reached $59.65 per barrel. The price increases reflect growing market anxiety about potential supply shortfalls from major oil-producing regions.

Iran's Strategic Position in Global Oil Markets

Iran holds significant importance in global oil supply chains as OPEC's fourth-largest producer. The escalating protests within the country have heightened market concerns about potential disruptions to oil production and export capabilities. Any significant reduction in Iranian oil output could create supply tightness in global markets, particularly given the country's substantial production capacity.

Investment Fund Activity and Market Sentiment

Investment funds have been actively boosting their bullish positions in oil markets, reflecting increased confidence in higher prices ahead. This positioning is driven by multiple supply risk factors, including the ongoing situation in Iran and persistent concerns about Venezuela's oil production challenges.

Regional Supply Risk Assessment

The current market dynamics highlight the vulnerability of global oil supply to geopolitical tensions in key producing regions. Middle East disruptions, combined with Venezuela's production issues, have created a risk premium in oil prices as traders factor in potential supply shortfalls from these critical sources.

The sustained three-day rally demonstrates market sensitivity to geopolitical developments and underscores the importance of stable production from major OPEC members in maintaining global energy security.