Oil Prices Climb on Supply Disruptions and Middle East Tensions

Oil prices rose on Wednesday as concerns over supply disruptions persisted following a winter storm that affected U.S. crude production and exports, while geopolitical tensions in the Middle East added further support.

Brent crude futures increased by 28 cents, or 0.4 percent, to $67.85 a barrel by 0410 GMT. U.S. West Texas Intermediate (WTI) crude gained 35 cents, or 0.6 percent, reaching $62.74 a barrel. Both benchmarks had surged roughly 3 percent on Tuesday.

Analysts estimated that U.S. producers lost up to 2 million barrels per day over the weekend, representing about 15 percent of national output. The severe winter storm strained energy infrastructure and power grids, causing crude and liquefied natural gas exports from Gulf Coast ports to drop to zero on Sunday, according to ship tracking service Vortexa.

Supply concerns in Kazakhstan also contributed to the rally. The Tengiz oilfield, the country’s largest, is expected to restore less than half of its normal output by February 7 as it recovers from a fire and power outage, sources familiar with the situation said. This came despite pipeline operator CPC reporting that it had returned to full loading capacity at its Black Sea terminal after completing maintenance at one of its mooring points. Toshitaka Tazawa, an analyst at Fujitomi Securities, noted that supply fears are underpinning prices but cautioned that once production stabilises, selling pressure could return.

Geopolitical tensions added another layer of uncertainty. A U.S. aircraft carrier and supporting warships recently arrived in the Middle East, officials said, raising the possibility of military action against Iran in response to nationwide protests and a violent crackdown. Analysts at ANZ highlighted that this development has contributed to elevated oil prices as markets weigh the risk of potential conflict.

On the policy side, OPEC+ countries, including Russia, are expected to maintain their current pause on output increases for March, according to three OPEC+ delegates. This ongoing restraint is supporting prices amid global supply concerns.

Inventory data also influenced the market. An extended Reuters poll suggested that U.S. crude and gasoline stocks had likely risen in the week ending January 23, while distillate inventories were expected to fall. However, figures from the American Petroleum Institute showed that crude and gasoline stocks actually declined, while distillate inventories increased last week, adding further volatility to trading.

Tazawa added that despite temporary supply disruptions and geopolitical risks, a projected global crude surplus this year could keep WTI trading near $60 a barrel for the near term.

Oil markets are now balancing storm-related U.S. production losses, disruptions in Kazakhstan, and tensions in the Middle East against expectations of steady global supply, leaving prices under pressure to adjust as conditions evolve.