Brent crude hit $65.47 per barrel on Tuesday after it appreciated by 2.5 per cent or $1.60 as the prospect of disruptions to Iranian crude exports overshadowed possible increased supply from Venezuela.
In the same vein, the US West Texas Intermediate (WTI) crude settled at $61.15 a barrel after climbing $1.65 or about 2.8 per cent during the session.
The oil market is looking at some developments in members of the Organisation of the Petroleum Exporting Countries (OPEC) Iran and Venezuela as well as talks on Russia’s war in Ukraine and US interest in taking control of Greenland.
Iran is facing its biggest anti-government demonstrations in years which have lasted for more than two weeks.
The country autocratic government has cracked down on protesters with about 2,000 people killed and thousands more arrested.
The development has drawn a warning from US President Donald Trump of possible military action. The American President said on Monday that any country that does business with Iran would be subjected to a tariff rate of 25 per cent on any business conducted with the United States.
China, the world’s largest oil importer, is the biggest customer for Iranian crude. Others include United Arab Emirates (UAE), Turkey, Iraq, and the European Union (EU).
Reuters reported that there is a possibility of tighter supplies ahead after four Greek-managed oil tankers were struck by unidentified drones on Tuesday. The tankers were in the Black Sea on the way to load oil at the Caspian Pipeline Consortium (CPC) terminal off the Russian coast.
Drone attacks at or near the CPC terminal have intensified in recent weeks and have affected the loading and departure schedules of Kazakhstan’s crude cargoes.
Kazakhstan’s oil output fell sharply at the end of November and early December after damage at the CPC export terminal disrupted flows.
Markets are also grappling with concern over additional crude supply hitting the market with a resumption in Venezuelan exports.
After the ousting of Venezuelan President Nicolas Maduro, President Trump said last week that the South American producer is set to hand over to the US as much as 50 million barrels of oil subject to Western sanctions.