Oil Price Forecast: WTI and Brent Trade Between Record Asian Demand and Iran Risk

Oil Price Forecast: WTI CL=F and Brent BZ=F between record Asian demand and fragile geopolitics

*Spot pricing and volatility in WTI CL=F and Brent BZ=F

Front-month WTI (CL=F) is trading in the low-$60s, with one snapshot showing $64.31 per barrel, up $1.98 on the day for a gain of roughly 3.2%. Brent (BZ=F) sits just below $70, around $69.44 per barrel, up $2.02 or about 3.0%. Those moves reverse much of the prior session’s drop, when Brent BZ=F slid to the high-$67s and WTI CL=F traded around $62.3–$62.5, marking more than two-week lows for both benchmarks.
The tape is behaving like a market caught between a macro fear trade and hard physical demand. On the one hand, futures spent Tuesday selling off on expectations that talks between Iran and United States could reduce the probability of a shooting conflict near the Gulf. On the other, prices snapped back as soon as traders were reminded that the same Iran temporarily restricted navigation through the Strait of Hormuz during naval drills, and political risk firms still assign around a two-thirds probability to a U.S. strike on Iranian assets by April.
The result: WTI CL=F and Brent BZ=F are trading inside a relatively tight band — low-$60s for WTI, high-$60s for Brent — but with intraday swings of 2–3% as sentiment lurches between de-escalation hopes and tail-risk hedging.

*Record Asian crude demand puts a hard floor under WTI and Brent

While paper markets react to headlines, the physical market in Asia is quietly putting in a new record. Total February crude imports into Asia are tracking around 28.51 million barrels per day, up from 27.48 mbpd in December and 26.22 mbpd in January. That is a new high in the dataset and a clear statement that refiners are running hard into early 2026.
The demand engine is dominated by China and India, but their sourcing patterns are diverging. China is buying more from both Russia and Saudi Arabia, with seaborne flows of Russian crude to Chinese refiners set to top 2.0 mbpd this month and estimates clustering around 2.07–2.08 mbpd. Lower Saudi official selling prices into Asia — cut to the weakest differential versus regional benchmarks in more than five years — are adding another incentive for Chinese refiners to lock in term volumes.
India is moving in the opposite direction. Russian barrels that once dominated its spot slate are being cut back under U.S. pressure and sanctions complexity. One key refinery at Jamnagar recorded a complete pause in seaborne Russian crude receipts in January, forcing a reshuffle toward Iraq, the Middle East more broadly, West Africa and the Americas. Imports of Saudi crude into India are projected to climb to around 1.03 mbpd in February, up sharply from roughly 774,000 bpd in January, the highest since late 2019.
For Brent BZ=F, the implication is straightforward: record Asian arrivals and deeper ties to both Russian and Middle Eastern streams tighten the market for seaborne light-sweet crude. For WTI CL=F, the signal is indirect but supportive. As international buyers pull in more Atlantic Basin and Middle Eastern cargoes, U.S. barrels become more relevant both as a marginal export flow and as the anchor to gasoline and distillate cracks. The gasoline benchmark itself is trading near $1.96 per gallon, up just over 2.2%, confirming that refined-product demand is not collapsing alongside AI-linked equity volatility.

Russian Urals pricing, sanctions and the structural discount in the crude complex

A large part of the current Brent BZ=F structure is being driven by how effectively sanctions are — or are not — constraining Russian flows. Russian fossil fuel export revenues in January ran at about €464 million per day, the lowest since the full-scale invasion of Ukraine, and down about 3% month-on-month. Volumes fell faster than revenue, down about 6%, indicating a modest firming in average realized prices.
Within that total, crude oil brought in roughly €205 million per day, of which about €156 million per day came from seaborne crude and €49 million from pipelines. Oil products added another €107 million per day, pipeline gas about €59 million per day, LNG €39 million per day, and coal €54 million per day. This is not a collapsed export machine; it is an adjusted one. Russia is still exporting large volumes, but at a structurally enforced discount.
Urals crude averaged about $54.2 per barrel in January, a roughly 4% month-on-month increase but still trading around $9.85 per barrel below Brent BZ=F. That differential is wide enough to keep Indian, Chinese and Turkish refiners interested but narrow enough that revenues remain meaningful to the Kremlin. Crude price caps nominally sit lower — the updated cap is around $44.1 per barrel — yet Urals has traded above that level for most of the past year, highlighting how easily entity-based caps can be circumvented.
The logistics reinforce that point. In January, Russian seaborne oil exports actually rose about 19%. Roughly 49% of crude volumes were carried on so-called “shadow” tankers already under sanctions, another 24% on G7-linked tankers and 8% on non-sanctioned shadow vessels. For refined products, the dependence flips: around 76% of volumes move on G7-linked tankers, with only about 19% on sanctioned shadow ships.
That structure explains why WTI CL=F and Brent BZ=F are not trading at war-zone levels despite two active conflicts and repeated threats to infrastructure. Sanctions are cutting into Russian fiscal capacity — Urals at $54.2 versus Brent BZ=F close to $69 keeps a double-digit discount — but global physical supply is still clearing. The key risk for crude benchmarks is not today’s sanctions regime but a potential future step: a full maritime-services ban on Russian oil, rather than price caps. That kind of shift would directly constrain volumes and would almost certainly widen the backwardation and push Brent BZ=F back into the mid-$70s or higher.

Europe’s LNG and pipeline dependence keeps barrels flowing and caps the risk premium

Despite high-profile rhetoric, the European Union remains a material buyer of Russian molecules. In January, the EU was the fourth-largest buyer of Russian fossil fuels, taking about €1.1 billion of supply from Russia’s top-five customer set. Roughly 59% of that was LNG (€657 million), with pipeline gas adding €319 million and crude under Druzhba exemptions about €137 million.
On a broader view, EU buyers still account for almost half — around 49% — of Russian LNG exports, with China taking about 23% and Japan 18%. For pipeline gas, the EU is again top at around 35%, ahead of China at 31% and Turkiye at 27%. That dependency explains why Russia’s gas revenues rose 3% month-on-month even as LNG revenues fell 18% and coal revenues dropped 23%.
For WTI CL=F and Brent BZ=F, this matters because it constrains how far Western policymakers are willing to push an embargo. Europe’s combined January fossil-fuel payments to Russia from its top five member-state importers came to around €915 million, 85% of which was natural gas. France alone imported about €315 million of Russian LNG in January, with volumes up 57% month-on-month, while total French LNG inflows rose only 15%. Belgium and Spain continue to receive Russian LNG as well.
As long as this structure persists, Russian exports will be squeezed but not choked. Urals will keep trading below Brent BZ=F, anchoring a discount in the wider barrel universe. That dynamic limits upside blow-off in Brent and WTI, but leaves an embedded geopolitical call option: any step toward a real maritime-services ban, tanker detention wave or shutdown of ship-to-ship transfers in EU waters would take millions of barrels out of the pool and reprice the entire curve higher.

*Hormuz, Iran–US nuclear talks and the near-term risk premium in WTI and Brent

Short-term moves in CL=F and BZ=F are whipsawing on headlines from the Gulf. Crude dropped more than 2% on Tuesday as traders priced a higher probability that Iran and the United States strike at least a partial nuclear understanding. After talks in Geneva, Iran’s foreign minister publicly said both sides had agreed on “guiding principles” for a future deal, which would imply lower odds of a direct clash and a lower risk of a prolonged disruption in Gulf exports.
Hours later, the same Iran partially closed navigation in the Strait of Hormuz during military drills. Even a temporary closure of the world’s most important oil chokepoint, through which roughly a fifth of global crude and products move, was enough to flip sentiment. Brent rebounded to about $67.6 and WTI CL=F to about $62.5 as traders reassessed the probability of any sudden supply shock. A political-risk house put the odds of a U.S. strike on Iranian assets by April at roughly 65%, a non-trivial scenario that keeps risk desks long gamma and refiners reluctant to run minimal inventories.
At the same time, there is a competing narrative that a broader diplomatic reset could push prices lower. One of the more aggressive scenario analyses in the headlines suggests that if a new U.S. administration secures parallel deals with Iran and Russia, crude could reprice toward $60 per barrel. That number is more political headline than base-case forecast, but it shows how quickly macro narratives can swing.
For now, markets are not trading either extreme. Brent BZ=F around $67–$69 and WTI CL=F around $62–$64 imply a modest risk premium on top of a well-supplied physical market. The real repricing comes only if talks break down and the Hormuz threat shifts from drills to actual disruption — or if a comprehensive deal leads to a material increase in legitimate Iranian exports and a further normalization of Russian flows.

Global macro, AI jitters and how cross-asset flows feed into oil futures

Away from barrels and tankers, oil is still part of a cross-asset risk complex dominated by equities, rates and the dollar. Asian equities are showing resilience: Japan’s Nikkei 225 is up close to 0.9% around 57,090, recovering from a three-day losing streak, while Australia’s S&P/ASX 200 is about 0.5% higher. Several major Asian markets — including Hong Kong, Singapore and South Korea — remain closed for holidays, moderating liquidity.
In the U.S., the Dow, S&P 500 and Nasdaq managed small gains — roughly 0.07%, 0.10% and 0.14% respectively — after an early selloff that took the S&P 500 down nearly 0.9% intraday before dip-buyers stepped in. Ten-year Treasury yields are parked around 4.05%, with 30-year yields near 4.68%. The dollar index is steady around 97.1, while the euro trades near $1.18 and sterling near $1.36.
For WTI CL=F and Brent BZ=F, that backdrop means the macro headwind is manageable but real. A firm dollar dulls the purchasing power of non-U.S. buyers, and AI jitters can trigger broader de-risking across commodities, particularly from systematic and CTA strategies that trade baskets rather than fundamentals. At the same time, gold prices near $4,867 per ounce and silver around $73.3 per ounce — however one interprets these levels in nominal terms — point to continued demand for hedges, which historically correlates with at least some support for energy as a portfolio diversifier.
Net-net, the cross-asset picture does not justify panic selling of oil here. Growth fears are present but not dominant, yields are elevated but stable, and risk assets are absorbing bad AI headlines without a wholesale liquidation. That leaves CL=F and BZ=F free to trade more on physical data, sanctions and geopolitics than purely on macro fear.

Price map for WTI CL=F and Brent BZ=F: $60 downside versus $70–$75 upside

Putting the pieces together, the current range for WTI CL=F in the low-$60s and Brent BZ=F just under $70 looks like a balance point between three forces: record Asian demand, structurally discounted Russian supply, and binary geopolitical risk.
On the downside, you have three main anchors. First, the idea that a comprehensive diplomatic push — combining progress on the Iran nuclear file with some kind of U.S.–Russia accommodation — could unlock more sanctioned barrels and move prices toward $60. Second, the empirical evidence that Russian Urals can still clear at around $54.2 per barrel despite caps, which means marginal barrels are still available at a notable discount. Third, softening institutional demand in some ETF and futures products, which is pushing more capital into yield-bearing alternatives.
On the upside, the drivers are both fundamental and political. Asia is on track for 28.51 mbpd of crude imports this month versus 27.48 mbpd in December and 26.22 mbpd in January. China is importing around 2.07–2.08 mbpd of Russian crude alone, while boosting purchases from Saudi Arabia after aggressive price cuts. India, despite trimming Russian barrels at Jamnagar, is still importing over 2 billion euros’ worth of Russian hydrocarbons in a single month when you include coal and products. Turkiye and Brazil remain large buyers of Russian oil products, with Turkiye taking around €2 billion of Russian hydrocarbons in January and acting as a key hub for both crude and refined flows.
If Hormuz tensions escalate beyond drills, or if sanctions evolve into a genuine maritime-services ban rather than a leaky price cap, the physical balance tightens quickly. Seaborne Russian crude exports rose 19% in January precisely because shadow tankers and ship-to-ship transfers in EU waters provided a safety valve. An aggressive crackdown on those practices — especially on the 50-plus shadow vessels older than 20 years, many with dubious insurance — would tighten supply, raise freight costs and steepen the backwardation in Brent BZ=F. In that scenario, Brent in the mid-$70s and WTI in the high-$60s are straightforward numbers, with higher spikes possible if any infrastructure is hit.
Between those extremes, the most realistic near-term map is a $60–$68 band for WTI CL=F and a $64–$74 band for Brent BZ=F, with frequent 2–3% daily swings as headlines toggle between progress and setback in Iran–US talks and between enforcement and loopholes in Russia sanctions.

Positioning view: Oil, WTI CL=F and Brent BZ=F – buy, sell, or hold?

Given current levels — WTI CL=F hovering in the low-$60s and Brent BZ=F just under $70 — the balance of data argues for a Hold with a tactical bullish bias, not an outright chase or an aggressive short.
On one side of the scale, you have: record Asian crude imports at 28.51 mbpd; Chinese and Indian refiners still expanding runs; Urals crude at $54.2 with only a ~$9.85 discount to Brent, confirming that demand for discounted barrels remains firm; and a sanctions architecture that is tightening Russian fiscal space without collapsing volumes. Add in the live possibility of miscalculation around Hormuz and a still-elevated 65% probability of some form of U.S. strike on Iranian targets by April, and the upside tail risk is obvious.
On the other side, there is a credible path to softer prices if diplomacy actually delivers: Iranian exports normalize, Russian flows become more regularized under a different political deal, and Citi-style $60 scenarios move from the opinion page into the trading book. Macro conditions — steady 4%-plus U.S. yields, a firm dollar, and periodic AI-driven equity selloffs — cap how much risk long-only allocators are willing to add to commodities at one time.
Putting a label on it: at low-$60s WTI CL=F and high-$60s Brent BZ=F, Oil is not screaming cheap or expensive. For directional traders, dips towards $60 on WTI and mid-$60s on Brent look like reasonable levels to add exposure against a stop below the recent swing lows, targeting any move back toward the upper end of the current range. For portfolio allocators, the more rational stance is a Hold: keep existing energy exposure, use volatility to rebalance around core positions, and wait for either a real diplomatic breakthrough or a clear escalation in the Gulf or in sanctions enforcement before materially changing the size of the bet.

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