Week in Review – Crude Prices React to Middle East Tensions and Fresh Supply Signals

Crude prices moved higher this morning as markets reacted to a mix of geopolitical developments, shifting supply signals, and fresh inventory data. Futures traded up about 70 cents per barrel, recovering part of the nearly $3 per barrel decline from the previous session, which followed comments from Donald Trump signaling a "wait-and-see" approach to Iran's crackdown on protests.

Tensions in the Middle East remain in focus. A senior U.S. official said Israeli Prime Minister Benjamin Netanyahu asked President Trump to delay any planned attack on Iran, as Israeli and Arab officials expressed concern about potential retaliation. At the same time, at least one U.S. aircraft carrier is moving into the region, with additional U.S. assets expected to follow in the coming days and weeks. Separately, the U.S. Treasury Department announced new sanctions targeting Iran's Secretary of the Supreme National Security Council, Ali Larijani, along with other individuals and entities tied to what it described as a "shadow bank network."

Developments in Venezuela continue to draw attention. The country's acting president, Delcy Rodríguez, said the government is submitting a proposal to reform its hydrocarbon law, aiming to allow new investment flows into undeveloped oil fields. In parallel, U.S. authorities seized another Venezuela-linked tanker in the Caribbean, marking the sixth vessel targeted in recent weeks that had carried Venezuelan crude.

In Europe and the Black Sea region, supply concerns resurfaced after drones struck two oil tankers approaching a Russian coastal terminal that handles most of Kazakhstan's crude exports. The attacks followed the recent U.S. seizure of a Russian-flagged vessel in the Atlantic, adding to uncertainty around seaborne flows. According to OPEC data, Russian oil production edged down by about 0.7% in 2025, while Kazakhstan's output declined in December and saw a sharp drop in early January due to export constraints at a Black Sea terminal.

On the products side, Russia's seaborne oil product exports rose 17% month over month in December to 9.069 million metric tons, supported by higher fuel output and seasonally weaker domestic demand. In the United States, refinery activity remained elevated, with utilization rates above 95%, contributing to a significant build in gasoline inventories.

Inventory data released by the Energy Information Administration (EIA) showed U.S. crude stocks rising by 3.4 million barrels to 422.4 million barrels, well above expectations. Gasoline inventories increased by 9 million barrels, the largest weekly build since December 2023, while distillate inventories, including diesel and heating oil, were nearly flat. Net U.S. crude imports rose sharply, reaching their highest level since November 2024.

Broader market data also influenced sentiment. U.S. economic indicators were mixed but generally stronger than expected, with manufacturing surveys from the Philadelphia Fed and Empire State returning to expansionary territory and initial jobless claims falling below forecasts. Import prices increased modestly, and measures tied to core inflation edged higher month over month.

Oil prices experienced sharp intraday swings during the week. Brent and WTI futures fell more than 3% after President Trump said killings of demonstrators in Iran appeared to be easing, reducing near-term fears of military escalation and supply disruption. Prices later stabilized as traders weighed ongoing geopolitical risks against signs of rising crude and product inventories.

Stakeholders across the industry continue to track developments in Iran, Venezuela, and the Black Sea, alongside inventory trends and refinery activity. By week's end, crude prices remained within the range seen in recent months, reflecting the push and pull between geopolitical headlines and supply-demand signals.

Prices in Review

Crude prices strengthened early in the week, rising from $58.72 on Monday to a midweek peak of $61.71 on Wednesday. Prices then pulled back on Thursday to $59.30 before opening today slightly higher at $59.58. From Monday to Friday, crude

Diesel prices climbed early in the week, rising from $2.1376 on Monday to a midweek high of $2.2511 on Wednesday. Prices then eased on Thursday to $2.2039 before firming again to $2.2293 on Friday, representing an increase of $0.0917 or 4.29%.

Gasoline prices rose through midweek, increasing from $1.7872 on Monday to a weekly high of $1.8436 on Wednesday. Prices then declined sharply on Thursday to $1.7802 before edging slightly higher to $1.7830 on Friday. At the end of the week, gasoline prices decreased by $0.0042, or 0.23%.