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Oil prices advanced on Tuesday as rising geopolitical tensions surrounding Iran pushed supply risk to the forefront of market sentiment, outweighing expectations of additional crude entering the market from Venezuela.
Brent crude oil, against which Nigerian crude oil is priced, rose 47 cents, or 0.7 percent to $64.34 per barrel, while U.S. West Texas Intermediate gained 45 cents, or 0.8 percent to trade at $59.95 per barrel during early trading hours.
Market participants focused on escalating unrest in Iran, one of the largest producers within OPEC, where widespread anti-government protests have intensified.
The developments have raised concerns about potential disruptions to crude output and exports, particularly given Iran’s role as a sanctioned supplier to global markets.
U.S. President Donald Trump warned of possible military action following reports of lethal force used against protesters, adding to uncertainty.
He is expected to consult senior advisers on potential policy responses, reinforcing fears of further escalation.
The geopolitical backdrop has added a risk premium to oil prices, with analysts estimating that unrest in Iran has contributed several dollars per barrel to current price levels.
Any tightening of enforcement measures or escalation in regional tensions could further constrain supply, particularly as Iran exports a significant portion of its crude to China.
At the same time, markets are assessing the potential return of Venezuelan crude exports following political developments in Caracas. While expectations of increased Venezuelan supply have weighed on sentiment in recent weeks, traders remain cautious about the pace, scale and sustainability of any supply increase.
Elsewhere, geopolitical risks broadened as fighting intensified in Eastern Europe, while uncertainty surrounding U.S. monetary policy and renewed political pressure on the Federal Reserve added to concerns about global economic stability and future oil demand.
Overall, oil markets remain highly sensitive to geopolitical developments, with Iran-related supply risks currently exerting greater influence on price direction than prospective supply increases from other producers.
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