Oil steadied as waning Iran supply-risk premium meets emerging trade friction

Oil prices remained largely range-bound on Monday as the geopolitical risk premium tied to Iranian supply continued to deflate, offset by a nascent "risk-off" sentiment stemming from a diplomatic stand-off over Greenland. 

Brent crude futures edged up $0.19, or 0.27%, to settle at $63.94 per barrel. 

Trading in WTI was suspended on Monday in observance of a federal holiday. 

The primary downward pressure on prices stemmed from reports that Iranian authorities have successfully quelled recent nationwide protests. With the perceived threat of a US-led strike on Iranian energy infrastructure retreating, traders have aggressively scaled back long positions. 

However, any significant slide in prices was capped by a brewing sovereignty dispute between Washington and Denmark over Greenland. The prospect of punitive US tariffs on European allies has raised the spectre of a broadened trade war, weighing on global equity markets and dampening broader investor appetite. 

Adding to the complexity of the market’s outlook are divergent fundamental signals. Bullish sentiment is being supported by heightened concern over Russian energy infrastructure and potential distillate shortages as colder weather patterns move across the Northern Hemisphere. Conversely, the anticipated influx of sanctioned Venezuelan crude to the US Gulf Coast continues to act as a significant supply-side anchor.

Market participants suggest that these competing forces—optimistic IMF growth forecasts for 2026 versus immediate supply expansions and trade uncertainties—are likely to lock crude into a period of sideways consolidation in the near term.

Written by: Aiman Haikal