Outlook
Brent's rally and the Iran/Venezuela risk backdrop underpin the OIL currency. In January 2026, Brent crude rose 16.2% to $70.69 per barrel on geopolitical tensions around Iran and Venezuela. A potential U.S. military action in Iran and OPEC+’s decision to hold output steady add to supply-demand uncertainty. At the same time, the U.S. easing sanctions on Venezuela could raise supply, potentially offsetting price gains. Taken together, OIL remains above its 3-month average but subject to headline risk and wider market moves.
Key drivers
- Geopolitical risk: Escalation around Iran and Venezuela supports Brent and the OIL currency, with spikes possible on headlines.
- OPEC+ policy: The decision to pause further output hikes provides price support; shifts could push OIL higher or lower.
- Supply dynamics: Venezuela sanctions relief could lift global supply; unexpected disruptions elsewhere would alter paths.
- Demand backdrop and macro: Global growth signals and China demand influence oil consumption and thus OIL levels.
- Dollar and market sentiment: USD movements influence OIL currency levels; a stronger USD tends to weigh on OIL in USD terms.
Range
- OIL to USD: 68.57; 7.3% above its 3-month average of 63.9; 3-month range 59.04 to 70.26
- OIL to EUR: 57.87; 6.2% above its 3-month average of 54.49; 3-month range 50.26 to 59.19
- OIL to GBP: 50.32; 5.9% above its 3-month average of 47.51; 3-month range 43.98 to 51.58
- OIL to JPY: 10517; 5.5% above its 3-month average of 9972; 3-month range 9139 to 10818
What could change it
- Iran-related developments: Escalation or de-escalation of tensions could drive Brent and OIL higher or lower.
- Venezuela policy shifts: Renewed sanctions or relief affecting supply would move prices.
- OPEC+ actions: Any changes to output policy beyond the pause could alter the price path.
- Global growth and demand data: Revisions to demand outlook, especially China, could shift oil use.
- USD volatility: A stronger dollar generally weighs on OIL in USD terms, while a weaker dollar supports it.
