Oil prices are getting an Iran bid as it appears that Russia is warning that they see an unprecedented escalation of tension in the region. Russia should know as they join naval exercises today with Iran in the Gulf of Oman and the northern Indian Ocean and Russia has been caught in a quagmire with Ukraine for the last 4 years, they understand what tensions in a region look like. The whole market is back into buying the rumors of war. It seems unlikely that Iran will change course from its highway to hell as Iran’s grand? Supreme Leader Al Khamenei Remains defiant against the international community especially the United States and Israel that is demanding that they halt uranium enrichment and curb missiles capability.
I’m sure Mr. Khamani is starting to realize that if he does those things up, he’s going have a hard time achieving his lifelong goal of wiping Israel off the face of the earth or following through on his dream of “Death to America”. And at 86 years old it must be hard for this old codger to admit that his life’s work has been a failure. But if you’re a guy like Khamani you probably take comfort in the fact that you could slaughter some of your own people as a consolation prize.
Or maybe Russia read today’s Wall Street Journal that is reporting that the U.S. military is assembling its most formidable concentration of air power in the Middle East since the 2003 Iraq invasion. This includes a surge of advanced F-35 and F-22 stealth fighters, additional command-and-control aircraft, strengthened air defenses, and a second aircraft carrier strike group en route—potentially the USS Gerald R. Ford—joining assets already in place like the USS Abraham Lincoln. The buildup provides options for a sustained, weeks-long air campaign against Iran, far beyond limited strikes such as the June “Midnight Hammer” operation on nuclear sites.
This morning, U.S. officials are saying that the Ford aircraft carrier, along with the accompanying destroyers, is still in the Atlantic Ocean and has not yet crossed the Strait of Gibraltar. Of course, that is going to be critical for oil traders because, with an attack on Iran seeming more likely, now it’s all about the timing of the attack.
As we know, the last attack on Iran was a quick pop and a drop; the buildup of buying the rumor of war really drove prices. But with the sense that this war could be more prolonged, the possible impact on oil prices might be longer lasting. One of the things we do know is that the Trump Administration is very sensitive to the cost of oil. During the last attack, they strategically hit nuclear sites and purposely avoided the oil fields, even as Israel pressed for them to cut off Iran’s funding by hitting those sites. The Trump Administration realized that those oil sites are going to be needed, especially if you get a regime change. You don’t want a new government trying to run Iran without some source of revenue to rebuild the country.
So far the price the escalating threats of potential US or Israeli military action against Iran have introduced significant volatility into global energy markets. Fears of supply disruptions, particularly through the Strait of Hormuz, have driven a risk premium into oil prices. Brent crude has risen to approximately $71.12 per barrel, reflecting recent gains of over 4% amid heightened tensions. In the US, retail diesel prices have followed suit, with the national average climbing to $3.711 per gallon, up 0.6% week-over-week, influenced by upstream crude price pressures.
We saw a late day surge yesterday on a report that Israeli officials are reportedly preparing for conflict and threats by Iran to close the Strait of Hormuz, a critical chokepoint for 20% of global oil shipments.
Any other area of interest that we see the risk premium go in once again as we did during the last attack on Iran is diesel. This uptick in diesel and the crack spread aligns with broader historical parallels from mid-2025 Israel-Iran clashes saw wholesale diesel prices surge 5% (15.1¢/gallon) in a single day, pushing averages above $3/gallon. Current tensions could amplify this if disruptions occur, potentially adding 10-20¢/gallon in short-term spikes due to supply chain vulnerabilities in trucking and heating oil sectors. But I’m sure the Trump Administration is very sensitive to that and hopefully the spike would be short lived.
This comes a day after Oilprice Tsvetana Paraskova reported that Iran and Russia are strengthening their economic and energy cooperation and consider joint development of another Iranian oilfield, top officials from the countries said on Wednesday. Russian Energy Minister Sergei Tsivilev led a high-level Russian delegation on a visit to Tehran this week during which Tsivilev and Iran’s Oil Minister Mohsen Paknejad discussed deepening the economic and energy cooperation.” That of course is assuming that there’s going to be a regime left to cooperate with.
In the backdrop, globalists at the International Energy Agency (IEA) are complaining that the Trump administration isn’t giving in to their globalist goals of heavily taxing the world and controlling our lives to bring us closer to net zero, even as the trillions of dollars they have spent have pushed us further away. Reports that the U.S. is going to withdraw from the International Energy Agency, or the green energy mouthpiece, are not the main goal of the U.S., according to Energy Secretary Chris Wright. He said, “Our goal is not to withdraw from the IEA, as it could give China stronger influence,” but at the same time, he said they will pull out if necessary.
Wright wants reform at the and getting back to their core mission of energy security and not acting like a climate advocacy organization. “Of course, the International Energy Agency promised us peak oil demand and peak oil supply, and they even promised us an oil glut. Where’s the glut? Well, to be honest with you, the glut has not appeared. Javir Blass at Bloomberg points out that Goldman Sachs—OK, it’s an excuse— but they say that global oil prices have not declined despite a ‘global surplus,’ and the key reason for this disconnect is that much of the global surplus has materialized as rising inventories of sanctioned oil ‘stuck at sea.’”. Oil supply held at sea on tankers—often in floating storage—doesn’t always signal a classic market glut in the same way onshore inventories do, because much of it involves sanctioned crude from countries like Russia, Iran, or Venezuela. These “dark” or restricted barrels are harder to place with traditional buyers due to sanctions, compliance risks, longer rerouting via shadow fleets, and higher shipping costs, making them effectively unusable or stranded in the short term for mainstream markets.
Demand also exceeds IEA expectations as Asia’s crude oil imports are expected to reach a record high in February, with demand surpassing IEA forecasts as leading importers increase their purchases.
On the supply side one of the hopes for diesel prices is the increased supply from Venezuela not only has energy secretary Chris Wright touted the fact that we’ve already seen $8 billion in Venezuelan oil sales but also the fact that a lot of energy companies are doing business with yesterday it was announced. That US refiners and Citco are seeking US approval to buy heavy crude directly from Venezuela’s state-owned oil company PDVSA bypassing trading houses like Trafigura and Vitol in a sign of stability and trust in the Venezuela oil industry. But are we being too trustful of the interim Venezuela President Delcy Rodriguez. Because they’re a long term to secure a long-term investment in Venezuela we’re going to have to see a transition to a secure democracy
On Jesse Watters Primetime on Fox News guest host Rachel Campos-Duffy interviewed Venezuelan opposition leader María Corina Machado who said that , “A free Venezuela can be the ‘Berlin Wall’ of the Americas. The fight is moral and it is winnable ” and that liberating Venezuela from its current regime could symbolize a major turning point for democracy in the region, akin to the fall of the Berlin Wall.
Rachel asked Maria, “You just heard that President Trump said, well, maybe I’ll go to Venezuela. And he’s also said, “hey, we’re working great with her. He said that the relationship between himself and Delce was a ten. Just like to get your thoughts on that.
Maria answered that “Well, this is a historic moment. For the first time in decades, we’re seeing a regime that destroyed a nation, looted our country, created corruption networks and criminal networks along the hemisphere begin to fall. And every control that can be put in place to overlook these criminals is needed.
Nothing is enough. And certainly, as we mentioned before, as we move along in this transition process, more guarantees, rule of law, contract enforcement will be put in place so great investment can come into Venezuela finally.
Rachel asked Maria, “Are you going to return to Venezuela? Are you campaigning? What’s happening? You are the face of the opposition movement.
Machado said that “ well, yes, I’m planning to go back to Venezuela as soon as possible. I am here coordinating with the Trump’s administration and many other actors in the United States that understand that this is a security issue for United States and for Venezuela. And we want to work together into that transition because there’s a great issue here.
There’s over a million Venezuelans in the United States. Almost 70 percent of them want to go back. And as soon as we have a transition to democracy, most of them will go. So mark my words, Rachel, this will be the largest voluntary return in history. So we are talking about a historic moment from a legacy perspective, legacy perspective. For the first time in history, once we move ahead into democracy in Venezuela, the Cuban regime will follow, the Nicaraguan regime will follow.
And for the first time in history, we will have the Americas free of communism and dictatorship. This is huge. This is the equivalent to the fall of the Berlin Wall for the Americas.
And this has been possible thanks to the courage and vision of President Trump. So as Venezuelans, we are very grateful for what he has done and looking forward to move along into building a democratic nation to which our Children can come back.
Then Rachel asked, “When do you think those elections should happen? How soon? And Mahado answered “Well, we have talked from a technical perspective, and we believe that between nine and 10 months, the technical issues can be addressed to have a free and fair election with manual vote, updating the registries so that those Venezuelans inside and abroad can vote, and putting full observation and surveillance, all the process so that we can have a real free and fair elections, as I say, with manual vote.
So, I guess that rules out mail in ballots.
In the meantime, we’re going to be hunkering down for a potential attack. Timing is going to be everything but it’s going to be dangerous to be short until we get a resolution. On the flip side if it does look like a pull back from the brink, oil prices will get a pretty hefty sell off at least initially.
Natural gas prices continue to get hit on the warmup in temperatures. But it’s not over yet. Fox Weather reports that the Philadelphia, New York City and Boston metro areas are bracing for a potential powerful nor’easter this weekend that could dump significant snow for millions across the Interstate 95 corridor, as well as other parts of the Northeast and Mid-Atlantic. However, much of the forecast remains uncertain. “While some snow appears to be the most likely outcome, all scenarios remain on the table, from a complete miss that tracks out to sea, to a major Nor’easter,” the FOX Forecast Center said Thursday.
Natural gas futures are showing some positive momentum today as the he March contract trying to recover from the warmup and strong US production , hovering around $3.04–$3.047 — that’s a solid +1.1% to +1.2% gain from yesterday’s close near $3.01.
After some recent pressure from mild weather outlooks and strong production, we’re seeing a nice rebound this morning. Buyers are stepping in, pushing it above key levels and adding a bit of bullish energy to start the day. LNG flows remain supportive too, keeping the market interesting. Yet the key of course is to keep supplies below average and that’s going to depend on the weather.
Reuters reports that U.S. energy firms likely pulled a near-normal 146 billion cubic feet (bcf) of natural gas from storage, according to the average estimate in a Reuters poll released on Wednesday. That figure compares with a draw of 182 bcf during the same week a year ago and a five-year average decline of 151 bcf for this time of year. If correct, the forecast for the week ended February 13 would decrease stockpiles to 2.068 trillion cubic feet. That would be about 2.9% below the same week a year ago. Reuters polled 13 analysts, whose estimates ranged from withdrawals of 100 bcf to 172 bcf, with a median decrease of 146 bcf.
