Oil hovers near six-month high as investors track US-Iran tensions

Published Sat, Jan 31, 2026 · 07:37 AM

Oil prices dipped a few cents per barrel on Friday (Jan 30), consolidating recent gains and holding near six-month highs, supported by nagging tensions between the US and Iran.

Brent crude futures settled at US$70.69 a barrel, down 2 US cents or 0.03 per cent. The March contract expires later on Friday. US West Texas Intermediate crude finished at US$65.21 a barrel, down 21 US cents or 0.32 per cent.

“It’s really all about Iran right now,” said John Kilduff, partner with Again Capital. “The market had priced in a lot of geopolitical risk on Iran, but it’s difficult to quantify the market at this point. The question is if there is action against Iran, what will the Iranians do?”

On Thursday, oil prices hit their highest since early August. Multiple sources said that US President Donald Trump was weighing actions against Iran that included targeted strikes, raising concerns about supply disruptions. Both the US and Iran have since signalled willingness to engage in dialogue, but Tehran on Friday said that its defence capabilities should not be included in any talks.

“These gains have paused amid prospects of a chilly ceasefire between Russia and Ukraine and the possibility that an attack on Iran might not occur, as the Trump administration opens the door for talks on Iran’s nuclear programme,” said Phil Flynn, senior analyst with Price Futures Group.

The US, which has strengthened its military position in the Middle East in recent weeks, issued new sanctions targeting seven Iranian nationals and at least one entity.

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A rise in the US dollar from four-year lows hit earlier in the week put some pressure on oil prices. Friday’s dollar strength followed Trump’s announcement that he would pick former Federal Reserve governor Kevin Warsh to head the US central bank when Jerome Powell’s term ends in May.

A stronger US dollar can limit demand from oil buyers paying in other currencies. “Rising US crude oil output after shutdowns and Kazakhstan nearing the resumption of production at the Tengiz oilfield also contribute to the change in sentiment, and given the week’s bullish performance, it is reasonable to expect some profit-taking ahead of the weekend,” said PVM Oil Associate analyst Tamas Varga.

Meanwhile, peak maintenance periods for Russian primary oil refining this year are expected this month and in September, based on Reuters calculations using estimates from industry sources.

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A Reuters poll of 32 analysts found that most expect prices to hold near US$60 a barrel this year as the prospect of oversupply offsets potential disruption from geopolitical tensions. REUTERS

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