Oil Up 2% as Trump Warns of Tariffs on Iran Trade Partners


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures jumped more than 2% Tuesday (1/13) as 
U.S. President Donald Trump's threat to impose tariffs on any country that does 
business with Iran spooked a market already on the edge over civilian protests 
that could disrupt the flow of oil from one of the Middle East's largest 
suppliers.

   Trump raised the prospect of a 25% tariff on Iran's trading partners in a 
social media post on Monday (1/12).  Oil is Iran's biggest export, with China 
reportedly buying more than 80% of crude shipped by the Islamic republic in 
2025.  

   As OPEC's fourth largest producer with an output of 3.2 million bpd, Iran 
has had limited customers for its oil due to U.S. sanctions imposed since 
Trump's first presidency in 2018.  Aside from China, Iran's trading partners 
include the UAE, Iraq, Turkey, India, Germany and Russia, reports said.

   Crude prices ended 2025 down by about 20% on concern over a global supply 
glut, which the International Energy Agency warned could reach 3.8 million bpd 
this year.  Since the start of 2026, the market has mostly rallied, however, on 
the developments in Iran and Venezuela -- another OPEC member whose production 
of between 800,000 bpd and one million bpd has come under U.S. control.  Prior 
to the tariffs he warned against Iran's business partners, Trump hinted that 
the U.S. could resort to military action against Iran if it killed civilian 
protestors. Tehran responded saying it was prepared for war.

   "We might be at an equilibrium now on supply concerns, with the Iranian 
production at stake making up more than 80% of the projected glut for this 
year," observed John Kilduff, partner at New York energy hedge fund Again 
Capital. According to reports on Monday, oil industry workers were among those 
who had joined nationwide strikes in Tehran.

   In the U.S., data released this morning by the Bureau of Labor Statistics 
revealed that inflation remained stable in December, with the Consumer Price 
Index up 2.7% year-on-year. The Energy Commodities Index slipped 0.4% from 
November, down 3% year-on-year.

   In Tuesday's morning trade, NYMEX WTI for February delivery rallied by 
$1.25, or 2.1%, to $60.75 bbl. The March ICE Brent futures contract rose $1.23, 
or 1.9%, to $65.10.

   Both WTI and Brent have jumped by some 9% over the past four sessions.

   Among refined products, the front-month ULSD futures climbed by $0.0437 to 
$2.1981 gallon. Front-month RBOB advanced by $0.0190 to reach $1.8410 gallon.

   The U.S. Dollar Index rose by 0.164 points to 98.79 against a currency 
basket.




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