SINGAPORE: Oil prices were headed for their biggest monthly gains in years on Friday, despite easing slightly, as escalating tensions in the Middle East raised fears of potential supply disruptions involving Iran, one of the world’s major oil producers.
Read More: Oil prices surge nearly three percent amid US-Iran tensions
Brent crude futures slipped 21 cents to $70.50 a barrel by 0139 GMT, after climbing 3.4% in the previous session to close at their highest level since July 31. The March Brent contract expires later on Friday, while the more actively traded April contract fell 37 cents to $69.22.
U.S. West Texas Intermediate (WTI) crude declined 39 cents to $65.03 a barrel, after also gaining 3.4% on Thursday to settle at its highest level since September 26.
Despite Friday’s pullback, both benchmarks are set to post their first monthly gains in six months. Brent is up more than 16% in January, marking its biggest monthly rise since January 2022, while WTI is on track for a gain of over 14%, its largest since July 2023.
Oil prices, a key driver and stabilising force for the economy, recently spiked but are already pulling back. Even at current levels (around $64), oil remains cheap by historical standards. Even if prices were to stay here, they would not pose a meaningful risk to growth or… pic.twitter.com/htdW601IJd
— AJ (@alojoh) January 30, 2026
Market sentiment has been driven by mounting geopolitical tensions after the United States increased its military presence in the Middle East. U.S. President Donald Trump warned Iran this week to negotiate over its nuclear programme or face possible military action, prompting Tehran to threaten retaliation.
“This has resulted in an added risk premium being built into oil prices as traders factor in potential disruptions to Iranian exports or flows through the Strait of Hormuz,” IG market analyst Tony Sycamore said.
Read More: Oil prices slide over 2% after Trump eases Iran war fears
Meanwhile, supply concerns have also been heightened by disruptions in Kazakhstan, Russia and Venezuela, affecting a combined 1.5 million barrels per day in January, according to JPMorgan analysts. Severe winter weather in the United States has further reduced output, while Kazakhstan is gradually restarting production at the Tengiz oilfield following earlier outages. Analysts, however, expect any military action to be limited and unlikely to target Iran’s oil infrastructure.