Crude Oil Prices Rise on January 12, As US–Iran Tensions Outweigh Supply Concerns

Crude oil prices continued to increase for the second straight day as traders shifted their attention to escalating US–Iran tensions. The rise followed a strong session on Wednesday, supported by broader geopolitical uncertainty.

Market participants noted that these developments outweighed data showing a significant increase in US crude inventories. The trend highlighted the current sensitivity of crude benchmarks to geopolitical risk despite persistent supply-side pressures.

Geopolitical Tensions Drive Up Crude Benchmarks

West Texas Intermediate moved closer to $64 a barrel after gaining over 1% on Wednesday. Brent crude closed above $69, extending the upward momentum observed in recent sessions.

Traders attributed the price increase primarily to renewed concerns over US–Iran relations, which have intensified following recent political developments. The tension has added a risk premium to crude futures, contributing to a stronger price reaction despite ongoing supply growth.

US Supply Data Shows Rising Inventories

In the US, crude stockpiles increased by 8.5 million barrels last week, reaching their highest level since June. The data was released by the Energy Information Administration and indicated a build-up in domestic supplies.

Higher inventory levels typically exert downward pressure on prices, but geopolitical concerns counterbalanced this effect. The International Energy Agency is set to release its monthly outlook later Thursday, which may again highlight a global supply surplus.

OPEC+ Production Declines in January

OPEC+ reported a fall in production last month, driven by decreased output from Kazakhstan, Venezuela and Iran. The group averaged 42.448 million barrels a day in January, marking a decline of 439,000 barrels compared to December.

The reduction was attributed to operational and geopolitical issues affecting member countries. Despite this drop, the broader market continues to monitor whether such cuts are sufficient to offset rising non-OPEC supplies.

Market Dynamics Reflect Mixed Signals

Crude prices have increased in nearly every week of the year so far, with only a single exception. This trend has been supported by geopolitical tensions, including US involvement in Venezuela and renewed attention on Iran after widespread protests.

However, several major banks have maintained that global supply remains abundant. Goldman Sachs stated this week that the surplus is emerging, although concentrated in regions less influential in price formation.

Read More: Stocks to Watch on Feb 12, 2026.

Conclusion

Crude Oil Prices continued their upward trend as geopolitical risks outweighed growing supply indicators. The market reaction underscored the influence of US–Iran tensions on short-term price movements.

Rising US inventories and expectations of a global surplus added contrasting signals to the outlook. Overall, the crude market remains shaped by a combination of geopolitical uncertainty and evolving supply dynamics.

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