Oil Price Forecast - WTI Back Above $61, Brent Near $65 as Geopolitics Reprice Oil

Oil Market Reset: CL=F And BZ=F Reprice Geopolitical Risk

Spot Levels For CL=F, BZ=F And Azeri Light

Front-month CL=F trades in the low $60s, with U.S. WTI up about three percent to roughly $61.3 after the latest session, while BZ=F (Brent) is around $65.5–$66 after a near three percent daily gain. Azeri Light, the flagship Caspian light-sweet benchmark, closed at $68.54 per barrel after a modest $0.03 increase, about 0.04% on the day. That level is more than four times above its April 2020 low of $15.81, but still far below the July 2008 all-time high of $149.66, underscoring that current pricing reflects a layered risk premium rather than an extreme demand shock.

Iran Unrest And The BZ=F Risk Premium

The primary driver behind the latest move in BZ=F is domestic unrest in Iran, not a swing in macro demand. Iran, one of OPEC’s core exporters, is facing its largest anti-government protests in years, with reports of hundreds of deaths and thousands of arrests. Markets now treat Iranian barrels as politically fragile, even though export volumes have not yet collapsed. Analysts estimate that this situation has added roughly $3–$4 per barrel of geopolitical premium into Brent. That math is visible in price action, with Brent trading around $65.1 versus low-$60s levels before protests intensified. On top of that, the U.S. president has warned that any country doing business with Iran could face a 25% tariff on business with the United States. Because a significant share of Iranian crude flows to Chinese refiners, firm enforcement would force rerouting, tighten availability of comparable grades for Europe and Asia, and lift the marginal barrel linked to BZ=F.

Black Sea Drone Strikes, CPC Exposure And Azeri Light At $68.54

Security risk is also rising around the Black Sea and the Caspian corridor. Four Greek-managed tankers en route to load at the Caspian Pipeline Consortium (CPC) terminal were struck by drones, directly threatening a route that moves Kazakh and regional crude into global markets. That pipeline is an important source of light sweet barrels for European refiners, and pricing for Azeri Light at $68.54 per barrel reflects its strategic position. With Azeri Light trading a couple of dollars above BZ=F, the grade already carries a structural premium due to quality and location. Sustained disruption or perceived vulnerability around CPC would force traders to pay up for alternative Mediterranean and European light-sweet supply and widen the Azeri Light premium further. Azerbaijan’s plan to lift oil output toward roughly 28 million tons in 2025, close to 560 thousand barrels per day, and its role as a gas supplier to Europe, make any threatened bottleneck in this corridor meaningful for both crude and broader regional energy balance.

Venezuela, Roszarubezhneft And Sanctioned Barrel Politics

While Iran and the Black Sea add upside risk to CL=F and BZ=F, Venezuela introduces a partial offset in the form of potential incremental supply. After regime change in Caracas, Washington has indicated that Venezuela could hand over as much as 50 million barrels of crude to the United States under new arrangements. Spread across a year, that implies roughly 135 thousand barrels per day, enough to matter at the margin if realized alongside other capacity additions. In parallel, Russia’s state-owned Roszarubezhneft has asserted that all of its Venezuelan assets, acquired after sanctions on Rosneft’s trading units in 2020, are the property of the Russian state and will continue to be developed. The company holds stakes in five producing joint ventures with PDVSA and has signaled an intent to expand production and maintain infrastructure. The market therefore faces an ambiguous Venezuelan signal. On paper, more barrels should pressure CL=F lower, but sanctions enforcement, tanker seizures, and political control over export routing can slow or fragment those flows. Futures curves are currently weighting Iran and Black Sea risk more heavily than the Venezuelan supply story, explaining why WTI has firmed back above $60 and Brent mid-$60 even as some banks still argue WTI could trade down toward $50 in a pure oversupply scenario.

Products, Refinery Runs And The Demand Side Of CL=F

On the products side, gasoline futures trade near $1.83 per gallon, rising alongside crude and supporting refining margins in the Atlantic Basin. At the same time, European gasoil margins are under pressure from robust refinery throughput and ample distillate output, which weighs on diesel cracks. This asymmetry matters for CL=F. Strong gasoline and acceptable margins justify elevated refinery runs in North America and parts of Europe, but soft gasoil cracks limit how far refiners are willing or able to bid up marginal crude. The overall picture is moderate and uneven demand rather than a synchronized consumption boom. The current rally in CL=F and BZ=F is therefore best read as risk premium revaluation layered on top of a stable demand baseline, not a demand-driven price spike.

Fair Value Bands For CL=F And BZ=F Under Different Scenarios

With CL=F around $61 and BZ=F around $65–$66, current prices already embed a material geopolitical cushion. That includes explicit premium for potential Iranian export disruption, concern over Black Sea tanker safety and CPC exposure, and some anticipation that Venezuelan supply will be uneven and politically controlled. If Iran’s protests fade, tariffs remain rhetorical, drone attacks subside and Venezuelan flows increase in an orderly fashion, the risk component can be stripped out. Under that de-escalation case, an equilibrium zone in the $55–$58 area for CL=F and roughly $60–$63 for BZ=F is reasonable given product cracks and demand. By contrast, if Iran’s unrest escalates into tangible export curbs through sanctions tightening, strikes or targeted facilities, while Black Sea risks persist, markets can test high-$60s for CL=F and the low-$70s for BZ=F without any additional demand strength, purely on perceived outage probability and rerouting costs.

Gas, Power And The Caspian Feedback Loop Into Crude

The broader energy complex amplifies crude volatility. Colder-than-normal conditions in China and Europe are tightening the LNG spot market again, supporting gas prices and reviving fuel-switching economics where power generators and industries can substitute oil products at the margin. Simultaneously, Azerbaijan’s rising gas output and European grid investment, including multi-billion-dollar transmission and interconnection deals, highlight persistent infrastructure constraints. As long as pipelines, LNG regas capacity and power grids remain bottlenecked, any local disruption in crude logistics, whether in Iran, the Black Sea or Venezuela, can have an outsized impact on regional benchmarks like Azeri Light and BZ=F, because rerouting flows is costly and slow.

Tactical View: CL=F And BZ=F As A Geopolitical Premium Trade

Given the price levels and the data, CL=F and BZ=F currently trade as geopolitical premium instruments rather than pure macro demand gauges. WTI around $61 and Brent near $65–$66 already reflect a meaningful risk surcharge relative to a clean fundamental equilibrium. Azeri Light at $68.54 confirms a premium on high-quality, strategically located light sweet crude. If geopolitical stress in Iran and the Black Sea persists, the short-term bias remains skewed to the upside, with scope for further gains toward high-$60s in WTI and low-$70s in Brent. If tensions cool and Venezuelan volumes start to land consistently, the downside lane back toward the mid-$50s in CL=F opens quickly. The risk-reward at current levels favors a neutral core stance with tactical long bias only for traders comfortable with sharp headline-driven swings, rather than treating current prices as a deep-value entry point.

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