Crude Oil Retreats as Venezuela Exports Restart While Iran Risks Support Prices

Key Moments

Brent fell to $64.92 a barrel and U.S. WTI to $60.63 a barrel after four consecutive sessions of gains.
U.S. crude inventories rose by 5.23 million barrels, with gasoline and distillate stocks also increasing.
Venezuela resumed crude exports under a supply deal as unrest in Iran kept geopolitical risk in focus.

Market Overview

Oil prices slipped on Wednesday, giving back a portion of the gains from the previous four sessions, as Venezuela resumed crude exports and U.S. inventories of crude and refined products climbed. Concerns about potential supply disruptions from Iran due to deadly civil unrest continued to underpin market sentiment.

Contract	Price	Move	Percentage Change	Time (GMT)
Brent futures	$64.92 per barrel	– $0.55	– 0.84%	0900
U.S. WTI crude	$60.63 per barrel	– $0.52	– 0.85%	0900

Geopolitics and Profit-Taking

Traders reassessed the recent rally that had been fueled largely by geopolitical concerns. As some of those risks had not yet translated into concrete export or supply losses, participants used fresh inventory data as an opportunity to lock in gains.

“The oil market has been driven by geopolitics, by anxiety. But if that doesn’t turn into actual supply or export disruption, people start to get disillusioned,” said Tamas Varga, oil analyst at PVM.

Varga added that substantial builds in U.S. crude and product inventories, reported late on Tuesday, gave market participants justification to take profits after the four-day advance.

U.S. Inventory Builds

Data from the American Petroleum Institute (API), based on market sources, showed a notable rise in U.S. stockpiles in the week ended January 9. Crude inventories in the world’s largest oil consumer increased by 5.23 million barrels.

U.S. Inventory Category	Change (week ended January 9)
Crude oil	+ 5.23 million barrels
Gasoline	+ 8.23 million barrels
Distillates	+ 4.34 million barrels

Gasoline stocks rose by 8.23 million barrels, and distillate inventories were up by 4.34 million barrels from the prior week. Official figures from the U.S. Energy Information Administration were scheduled for release later on Wednesday.

A Reuters poll on Tuesday indicated that market expectations were for U.S. crude inventories to have declined over the same period, with gasoline and distillate stocks anticipated to increase.

Venezuelan Supply Back in Play

On the supply side, prices faced additional pressure as Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), began unwinding earlier output cuts imposed under a U.S. embargo. According to three sources, crude exports from the country were resuming.

Two supertankers left Venezuelan waters on Monday, each carrying about 1.8 million barrels of crude. These cargoes may represent the initial shipments under a 50-million-barrel supply agreement between Caracas and Washington designed to restart exports following the U.S. capture of Venezuelan President Nicolas Maduro.

Iran Unrest Sustains Risk Premium

Offsetting some of the downward pressure from higher inventories and Venezuelan flows, escalating protests in Iran increased worries over possible supply disruptions from the fourth-largest OPEC producer.

U.S. President Donald Trump on Tuesday urged demonstrators in Iran to continue their protests and said assistance was forthcoming, without providing details.

“Protests in Iran risk tightening global oil balances through near-term supply losses, but mainly through rising geopolitical risk premium,” Citi analysts said in a note, as they raised their three-month outlook for Brent to $70 a barrel.

The analysts pointed out that the unrest had not yet reached Iran’s primary oil-producing regions, which had so far limited any direct effect on output.

“Current risks are skewed toward political and logistical frictions rather than direct outages, keeping the impact on Iranian crude supply and export flows contained,” they said.