Outlook
Oil remains resilient on geopolitical risk and supply dynamics, keeping Brent and the OIL-linked currencies sensitive to headlines. Brent surged into early 2026 amid tensions in Iran and Venezuela, with potential U.S. action against Iran adding risk premia. U.S. sanctions on Russia and OPEC+’s pause on production increases for Q1 2026 add further supply-face risk to the oil complex. CAD, NOK and RUB typically move with oil, so they may strengthen if oil stays elevated, while broad USD moves and risk sentiment can temper those gains. Current OIL price data show OIL to USD around 69.05, near 7-day highs and about 8.6% above the 3-month average of 63.6, with a wide trading range of 59.04 to 69.09. OIL to EUR is about 58.08, OIL to GBP around 50.65, and OIL to JPY near 10,665, reflecting broad oil strength.
Key drivers
- Geopolitical tensions in Iran and Venezuela lifting Brent and oil-linked FX.
- Potential U.S. military action against Iran maintaining an elevated risk premium on oil.
- U.S. sanctions on Russia disrupting supply and supporting oil prices.
- OPEC+ decision to pause further production increases for Q1 2026 to manage supply.
Range
OIL to USD: 69.05; 7-day high near 69.05, 3-month average 63.6, range 59.04–69.09
OIL to EUR: 58.08; 3-month average 54.31, range 50.26–58.45
OIL to GBP: 50.65; 3-month average 47.40, range 43.98–50.86
OIL to JPY: 10665; 3-month average 9936, range 9139–10818
What could change it
- Escalation or de-escalation of Iran/Venezuela tensions, or shifts in U.S. action, could push Brent and the OIL-linked currencies higher or lower.
- Changes in sanctions, or a shift in OPEC+ policy, could alter supply expectations and oil pricing.
- A noticeable shift in global demand (for example, China or travel seasonality) could affect oil and related FX.
- A broad shift in risk sentiment or USD strength could offset or amplify moves in commodity currencies.
