Oil Climbs as Trump Tariff Threat on Iran Lifts Hedging Costs

Oil markets reprice Iran risk as tariff talk broadens exposure

Oil prices climbed again on Tuesday, Jan. 13, 2026, as Iran unrest and Washington’s rhetoric kept traders focused on supply risk. Brent crude traded around $64 a barrel and U.S. West Texas Intermediate hovered near $60, levels that keep energy on the radar for inflation and interest-rate pricing, and the policy uncertainty lifts near-term risk premia.

Brent was last quoted near $64.09 a barrel, while WTI stood around $59.73. The gains followed Monday’s seven-week high settlement in Brent and extended a multi-session rise that has lifted market volatility in crude options and widened oil hedging costs for fuel buyers.

Trump tariff threat adds a secondary pressure point for Iranian barrels

The Trump administration has signaled it is prepared to impose a 25% tariff on goods from any country that continues doing business with Iran. The tariff threat is aimed at isolating Tehran economically, but the market impact comes from uncertainty over enforcement and exemptions, because that uncertainty can chill financing and shipping even before rules are published.

Iran’s export channels are concentrated. China buys more than 80% of Iran’s seaborne crude and imported about 1.38 million barrels per day on average in 2025, according to shipping and analytics estimates. If buyers demand steeper discounts to compensate for compliance risk, or if cargoes sit longer in storage, Asia can feel tighter prompt supply even when global inventories look adequate.

A $3–$4 premium is being priced, and oil hedges are getting pricier

Banks have been marking up the geopolitical component embedded in crude. Barclays has estimated that Iran-related tension has added roughly $3–$4 per barrel to prices, a range that often expresses itself first through the front of the curve and through option pricing.

Options activity has shifted toward upside protection. Recent sessions showed heavy demand for Brent call options, a common way to buy insurance against a rapid price jump. As more investors reach for that protection, implied volatility rises and the cost of those hedges increases, which matters for airlines, shippers, and industrial fuel buyers.

Iran unrest matters most through exports and shipping, not headlines alone

The market is still reacting to probabilities, not confirmed outages. Iran is a large producer within the Organization of the Petroleum Exporting Countries, and its exports remain meaningful despite years of sanctions. Traders are watching whether protests and the security response spill over into operational disruptions at ports, pipelines, or the financial plumbing that supports cargo movements.

The Strait of Hormuz is the key chokepoint. A rise in war-risk insurance, tighter rules on vessel movements, or an incident that slows traffic can tighten delivered supply quickly. Even without a physical disruption, the perception of higher risk can lift benchmark prices and keep volatility elevated.

Venezuela supply expectations are limiting upside for crude

The rally has another anchor: expectations that Venezuelan exports could increase after the removal of President Nicolas Maduro, and that the United States could receive up to 50 million barrels over time as part of a negotiated flow. Additional heavy crude would be particularly relevant for U.S. Gulf Coast refiners, where feedstock quality can matter as much as headline Brent prices.

This prospective supply is one reason the move has been orderly. Traders are weighing Iran risk against a path where sanctioned barrels elsewhere re-enter the market and where OPEC and its allies can adjust output policy if prices rise too quickly.

Market impact: energy equities, inflation trades, and rate sensitivity

When oil climbs on geopolitics, energy producers tend to gain as cash-flow assumptions improve and dividend and buyback capacity looks more secure. Refiners can benefit if crude differentials widen, but their margins also depend on gasoline and diesel cracks, which can tighten if consumers react to higher pump prices.

Higher crude can push inflation expectations up at the margin, especially when the move feeds into retail fuel and freight costs. That can lift longer-dated yields through a higher inflation term premium, pressuring rate-sensitive equities and widening credit spreads for energy importers. In currencies, a sustained oil rise typically supports major exporters while squeezing importers, while the dollar can firm on risk-off sessions because of its liquidity.

Scenarios: what changes the risk premium from here

Base case is that unrest grows but exports continue, keeping a risk premium in place while Brent trades roughly $62–$66 and WTI holds near $58–$62. Under that outcome, the biggest changes are in hedging costs, options volatility, and sector leadership in equities rather than in a broad macro regime shift.

An upside scenario needs a clear trigger such as stricter enforcement signals on the tariff threat, new constraints on shipping and insurance, or visible reductions in Iranian loadings. Those conditions would tighten prompt supply and can steepen backwardation as refiners bid for nearby barrels.

A downside scenario is defined by de-escalation and supply relief, fewer signs of export disruption, clearer Venezuelan deliveries, or softer demand indicators in U.S. data that revive the surplus narrative. In that case, the premium can fade quickly even if geopolitical headlines remain noisy.