Oil prices surged to their highest level in months in Wednesday’s session after reports emerged that U.S. President Donald Trump is weighing targeted strikes on Iranian military positions as he pursues regime change. Brent crude for March delivery was up 3.63% to trade at $70.92 per barrel at 12.40 pm ET, marking the first time Brent has crossed the pivotal $70 per barrel mark since July 2025, while the corresponding WTI contract gained 3.72% to $65.49. Unrest in the OPEC-producing country has left thousands dead, with a U.S.-based rights group HRANA putting the death toll at 5,937 while the Iranian authorities put it at 3,117. The protests started in Tehran’s bazaars on December 28, 2025, due to the rapid devaluation of the Iranian rial against the U.S. dollar and soaring inflation and prices of basic goods. The Iranian Rial has experienced a catastrophic devaluation, falling to record lows of around 1.4 to 1.5 million Rials per US Dollar in January 2026, from around 25,000 Rials per USD a decade ago.
And now commodity analysts at Standard Chartered have reported that the bearish oversupply narrative that was so prevalent especially in the second half of 2025, has weakened as traders turn their attention to a more positive H2-2026. StanChart notes that demand expectations by Wall Street and the leading energy agencies are being adjusted higher for the current year. The International Energy Agency (IEA) has increased its 2026 demand growth forecast, partially due to a recovery in petrochemical feedstock demand, offsetting a slowdown in gasoline gains. That said, the IEA has projected a more conservative demand growth of around 930 kb/d in 2026. Despite the upward revisions, the overall outlook for 2026 is for “modest” or “subdued” growth (around 700k-900k bpd) compared to historical trends, largely due to rising transportation electrification.
However, StanChart says low prices have begun to quash U.S. shale output growth. Previously, we reported that U.S. shale drilling pioneer Continental Resources has suspended drilling in North Dakota’s Bakken shale for the first time in decades, with billionaire founder Harold Hamm decrying low oil prices, “This will be the first time in over 30 years that Harold Hamm has not had an operation with drilling rigs in North Dakota,” Hamm told Bloomberg in an interview. “There’s no need to drill it when margins are basically gone.’’ According to BloombergNEF, the Bakken is viewed as a bellwether for the U.S. shale sector, with the basin currently having a breakeven price of $58/bbl to cover costs. Still, StanChart remains cautiously optimistic and expects oil prices to average low to mid $60s per barrel in 2026.
