Oil prices traded in a narrow range on Monday following last week’s strong gains, as markets balanced the risk of supply disruptions linked to escalating protests in Iran against the possibility of additional supply returning from Venezuela.
At 08:15 ET (13:15 GMT), Brent crude futures for March delivery were down 0.3% at $63.16 a barrel, while U.S. West Texas Intermediate (WTI) futures eased 0.1% to $58.87 a barrel.
Both benchmarks climbed more than 3% last week, marking their largest weekly advance since October.
Iran unrest raises supply risk
Investor attention remains firmly on Iran, a major oil producer in the Middle East, where anti-government demonstrations have intensified in recent days.
Rights groups estimate that more than 500 people have been killed amid the unrest. Iranian officials have warned that U.S. military bases in the region would be targeted if Washington intervenes in support of protesters, fuelling concerns about a wider regional conflict.
Any escalation could threaten oil shipments through the Strait of Hormuz, a critical transit route for global crude supplies. U.S. President Donald Trump has adopted a tougher stance, saying last week that the United States would not remain passive if Iranian authorities continued to use violent force against demonstrators. Trump is expected to consult senior advisers on Tuesday to assess possible responses.
“Iran is the fourth-largest OPEC member, producing around 3.2m b/d of crude oil. So, this leaves a fair amount of supply risk hanging over the market,” ING analysts said in a note.
Venezuela developments limit upside
At the same time, price gains have been restrained by signals from Washington that sanctions on Venezuela’s oil sector could be eased.
U.S. Treasury Secretary Scott Bessent said additional restrictions could be lifted as soon as this week to allow oil exports. Trump also said recently that Caracas could deliver up to 50 million barrels of previously sanctioned crude to the United States.
Despite these signals, major oil companies remain wary. ExxonMobil (NYSE:XOM) has previously described Venezuela as “uninvestable” without substantial political and legal reforms.
“It may be difficult to see oil companies that previously had assets expropriated by the Venezuelan government re-enter without receiving the compensation they were awarded in international courts,” ING analysts added.
Markets are also monitoring potential supply risks from Russia, as Ukraine continues to target Russian energy infrastructure and as the possibility of tougher U.S. sanctions remains in play.
Goldman sees softer prices ahead
Looking further out, Goldman Sachs said on Sunday that oil prices are likely to ease over the course of 2026 as rising supply creates a surplus, even though geopolitical risks linked to Iran, Venezuela and Russia are expected to keep volatility elevated.
The bank reiterated its average 2026 price forecasts of $56 per barrel for Brent and $52 for WTI, and expects prices to trough at $54 and $50, respectively, in the final quarter as inventories build across OECD countries.
“Rising global oil stocks and our forecast of a 2.3mb/d surplus in 2026 suggest that rebalancing the market likely requires lower oil prices in 2026 to slow down non-OPEC supply growth and support solid demand growth, barring large supply disruptions or OPEC production cuts,” Goldman Sachs said.