Oil Jumps 16% in January Amid Tensions Between the U.S. and Iran
Oil prices rose significantly in January 2026, recording a monthly increase of over 16%, amid escalating fears of supply disruptions due to tensions between the United States and Iran.
Brent crude closed at $70.69 per barrel, while West Texas Intermediate (WTI) reached $65.21.
Despite a slight decline during the last Friday session, prices maintained their gains to close near their highest levels in six months.
Data showed that Brent crude rose weekly by 7.3%, while it increased monthly by 16.2%, whereas WTI recorded a weekly rise of 6.8% and a monthly increase of 13.6%.
In this context, John Kilduff, a partner at Again Capital, said:
"The current situation revolves around Iran. The market has priced in significant geopolitical risks, but it is difficult to accurately gauge their impact. The question now is: How will Iran respond if actions are taken against it?".
Fears escalated following reports that U.S. President Donald Trump is considering actions against Iran, including limited strikes, raising the possibility of supply disruptions.
Meanwhile, Tehran has expressed a willingness to engage in dialogue but emphasized that its defensive capabilities will not be part of any talks.
The United States has also increased its military presence in the region and imposed new sanctions targeting seven Iranian citizens and at least one entity.
On the other hand, the rise of the U.S. dollar from its lowest levels in four years has pressured oil prices, as a strong currency can reduce demand from oil buyers using other currencies.
This comes after Trump announced the selection of Kevin Warsh to head the U.S. central bank after Jerome Powell's term ends in May 2026.
Despite recent gains, a Reuters poll of 32 analysts showed that the majority expect oil prices to stabilize around $60 per barrel during this year.
