Outlook
Oil remains the dominant driver for the OIL currencies. Brent is near 90-day highs around 70.26, supported by geopolitical risk and potential supply disruption, with markets showing a wide intraday range. The strongest near-term impulse for CAD and NOK comes from higher oil prices, while RUB may strengthen with oil if sanctions and revenues permit, though Russia‑specific risks and policy noise can mute moves. A shift in risk appetite or a sharp USD move can override oil strength and alter the trajectory for these currencies. If oil eases back toward the lower end of its range, CAD and NOK may lose some of their upside, and RUB could weaken again.
Key drivers
- Geopolitical tensions in Iran and Venezuela lifting Brent and oil-linked currencies.
- Potential U.S. military action against Iran adding to oil risk premium.
- U.S. sanctions on Russia disrupting supply, contributing to price support.
- OPEC+ pauses further production increases in Q1 2026 to curb supply growth.
Range
Brent Crude OIL/USD: 59.04 to 70.26; OIL/EUR: 50.26 to 59.20; OIL/GBP: 43.98 to 51.59; OIL/JPY: 9,139 to 10,818.
What could change it
- Easing or escalation of geopolitical tensions (Iran, Venezuela, Russia) altering oil risk premia.
- OPEC+ policy surprises (unexpected cuts or increases) shifting the supply outlook.
- Major changes in global oil demand or supply dynamics (economic data, energy policy, sanctions).
- Broad USD shifts or a shift in global risk sentiment that overrides oil moves.
