Oil Prices Climb Amid Heightened Geopolitical Tensions Over Iran and Venezuela

Oil prices maintained upward momentum on Tuesday, reversing earlier losses during Asian trading sessions, as geopolitical risks emanating from Russia and Iran overshadowed persistent oversupply concerns. Trading volumes remained modest during the semi-holiday period.

Both benchmark contracts gained approximately 0.4 per cent, with West Texas Intermediate crude trading above $58 per barrel whilst Brent crude exceeded $62 per barrel. The rally reflected a renewed geopolitical risk premium, driven primarily by statements from US President Donald Trump over the preceding 24 hours.

Following discussions with Israeli Prime Minister Benjamin Netanyahu in Florida, President Trump disclosed that the United States had conducted a strike on a Venezuelan coastal facility allegedly used for drug trafficking operations. The President indicated that US forces had targeted both vessels and the loading infrastructure, asserting that the facility was “no longer around”.

During the same briefing with the Israeli Prime Minister, President Trump raised the prospect of additional military action against Iran should the Islamic Republic resume activities related to its nuclear weapons programme. The President suggested that intelligence indicated Iran might be developing capabilities at alternative locations, following the destruction of previous sites.

Trump referenced the potential deployment of B-2 bomber aircraft, noting the considerable logistical commitment such operations would entail. The President alluded to previous strikes conducted in June 2025, emphasising that the administration possessed detailed intelligence regarding Iran’s activities and locations.

Oil markets received additional support from reports concerning communications between Russian President Vladimir Putin and President Trump. The Kremlin indicated that Russia would reassess its position in US-brokered peace negotiations aimed at concluding the conflict in Ukraine, following what Moscow characterised as a Ukrainian drone attack on a presidential residence.

Yury Ushakov, a Kremlin aide, informed TASS news agency that whilst dialogue with the United States would continue, the alleged attack would not remain “unanswered”. The statement underscored the fragility of ongoing diplomatic efforts.

Russia subsequently responded to escalating US-Iran tensions, advocating restraint following President Trump’s indication that Washington might conduct further strikes should Tehran resume nuclear weapons development activities. The intervention highlighted the complex geopolitical landscape affecting energy markets.

The price movements occurred against a backdrop of broader market concerns regarding global oil supply dynamics. Traders weighed the competing influences of geopolitical risk premiums against fundamental supply considerations, with the former prevailing during this particular trading session.

Market participants remained attentive to developments in multiple theatres, including the Middle East, Latin America and Eastern Europe, as these regions continued to influence crude oil price discovery. The convergence of these geopolitical factors provided support for oil prices despite underlying concerns about demand fundamentals and production levels.