Trump Leaves Oil Markets Uncertain About Iran

Oil Market Volatility Amid Uncertainty

The oil market is currently experiencing significant fluctuations, largely influenced by unpredictable moves from former President Trump. Concerns over Iran have caused prices to spike, only to retreat when more reassuring news emerges.

Market Highlights for January 16, 2026

Will Trump Target Iran Again? This week, speculation has been rampant about whether Donald Trump will take further action against Iran. Initial surges in oil prices suggested an imminent escalation, but Trump later downplayed the situation, stating there were no executions in Iran. With little impact from Venezuelan developments, Brent crude continues to hover around $65 per barrel as traders await the next move from the White House.

Key Developments in the Energy Sector

• OPEC’s Optimistic 2027 Forecast: In its latest monthly report, OPEC projected global oil demand to rise by 1.34 million barrels per day in 2027, citing robust economic growth and a slower adoption of biofuels.
• US Pursues More Tanker Seizures: The US government has sought additional court warrants to seize tankers linked to Venezuela. Recently, US authorities intercepted an empty vessel that had left Venezuelan waters earlier this month.
• OPEC Considers Venezuela’s Status: President Trump suggested that Venezuela, a founding OPEC member, should remain in the organization, fueling speculation that the US may leverage this relationship for strategic insights into OPEC’s future decisions.
• China Increases Oil Purchases: According to official data, China’s crude oil imports reached a record 55.97 million tonnes in December, up 17% year-over-year, as increased Russian supplies offset a decline in Iranian imports.
• US Shale Industry Eyes Further Mergers: Reports indicate that Devon Energy and Coterra Energy are exploring a merger that would create a major independent producer valued at $44 billion, with a combined output of 1.6 million barrels of oil equivalent per day.
• UK Expands Offshore Wind Capacity: The UK government has awarded contracts for 8.4 GW of new offshore wind projects, enough to supply energy to 12 million homes, at a strike price of £90.91 per MWh.
• Indonesia Delays B50 Biodiesel Rollout: Indonesia has abandoned plans for a mandatory B50 biodiesel policy, citing that the expanded Balikpapan refinery can meet national demand.

Additional Industry Updates

• California Faces Federal Lawsuit Over Oil Drilling: The US Department of Justice has challenged California’s restrictions on oil drilling near community areas, arguing that federal regulations take precedence.
• Drone Attacks Disrupt Tanker Traffic: After a series of drone strikes on tankers near Russia’s Black Sea coast, European refiners have reduced purchases of Kazakhstan’s CPC Blend, causing price discounts.
• EU Commodity Trading Stalls Amid Regulatory Confusion: European trading activity was disrupted after the European Commission proposed exempting fertilizers from the carbon border adjustment mechanism, leading to uncertainty among traders.
• Ghana Considers Overhauling Gold Policies: With gold prices nearing $4,600 per ounce, Ghana is weighing the cancellation of investment agreements and a potential doubling of royalties to capitalize on higher revenues.
• China’s Tax Policy Boosts Lithium Prices: Lithium carbonate prices jumped over 10% after China’s Finance Ministry announced the end of VAT export rebates for battery products by 2027.
• Shipping Delays in the Turkish Straits: Navigation through the Dardanelles was suspended when a Mozambique-flagged tanker suffered engine failure, worsening existing delays that have stretched up to a week.

By Tom Kool for Oilprice.com

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