Oil prices halted their upward trajectory on Wednesday, declining after four consecutive days of increases, as Venezuela recommenced exports. However, concerns regarding potential disruptions to Iranian supply due to severe civil unrest in the significant Middle Eastern producer continue to cast a shadow over the market. Brent futures experienced a decline of 9 cents, reflecting a decrease of 0.14%, with prices settling at $65.38 per barrel as of 0207. U.S. West Texas Intermediate crude experienced a decline of 12 cents, representing a decrease of 0.20%, settling at $61.03 per barrel.

Brent futures experienced a 2.5% increase on Tuesday, while WTI rose by 2.8%. This follows a notable 9.2% rise in prices for both contracts over the last four trading sessions, driven by escalating protests in Iran that have heightened concerns regarding potential supply disruptions from the fourth-largest OPEC producer. U.S. President Donald Trump on Tuesday encouraged Iranians to continue their protests, indicating that assistance was forthcoming, though he did not clarify the nature of the support to be offered. Analysts at Citi noted that protests in Iran pose a risk to global oil balances by potentially leading to near-term supply losses, primarily due to an increase in the geopolitical risk premium. Consequently, they have adjusted their outlook for Brent over the next three months to $70 a barrel.

The analysts at Citi observed that, to date, the protests have not extended to the primary Iranian oil production regions, thereby constraining the impact on actual supply.Current risks are tilted toward political and logistical frictions rather than direct outages, thereby maintaining the impact on Iranian crude supply and export flows within manageable limits,” they stated. In response to Iranian apprehensions, Venezuela, a founding member of the Organization of Petroleum Exporting Countries, has initiated a reversal of oil production cuts implemented due to a U.S. oil embargo, as crude exports are reportedly resuming, according to sources. On Monday, two supertankers left Venezuelan waters, each carrying approximately 1.8 million barrels of crude. This development could signify the initial shipments of a 50-million-barrel supply agreement between Caracas and Washington, aimed at revitalizing exports following the U.S. capture of Venezuelan President Nicolas Maduro.

Nonetheless, the fundamentals of the oil market indicate a considerably more relaxed supply and demand scenario, even in the face of geopolitical challenges. The U.S. inventory data released late on Tuesday provided further reinforcement. Crude stocks in the United States, the largest oil consumer globally, increased by 5.23 million barrels during the week ending January 9, as reported by the American Petroleum Institute, according to market sources. According to the sources, the API data indicated an increase in gasoline inventories of 8.23 million barrels, alongside a rise in distillate inventories of 4.34 million barrels compared to the previous week. Data on stockpiles from the U.S. Energy Information Administration is set to be released later on Wednesday. A poll indicated on Tuesday that U.S. crude oil stockpiles were anticipated to have decreased in the previous week, whereas gasoline and distillate inventories were likely to have increased.