By: Economy Middle east

Oil prices retreated slightly during Tuesday’s trading session as market participants balanced immediate supply disruptions in the United States against a broader outlook of comfortable global supply. Despite a severe winter storm curbing production in the U.S. Permian Basin, both Brent and WTI crude saw marginal declines as traders kept a watchful eye on geopolitical developments in the Middle East and upcoming OPEC+ deliberations.

As of Tuesday morning, the primary benchmarks displayed a slight cooling after recent volatility. Brent Crude, the international benchmark for oil, fell 42 cents, or approximately 0.65 percent, trading at $64.35 per barrel. Similarly, West Texas Intermediate (WTI), the U.S. standard, dropped 35 cents, also around 0.58 percent, settling near $60.28 per barrel. While these intraday moves are modest, they reflect a “wait-and-see” approach from investors who are weighing the temporary loss of millions of barrels of U.S. output against the potential for increased supply from other global players.

Supply disruptions: The U.S. winter storm

The most immediate factor impacting the market this week is a massive winter storm sweeping across the United States. Analysts estimate that at its peak over the weekend, the freezing conditions knocked out up to 2 million barrels per day (bpd) of production—roughly 15 percent of total U.S. national output. The Permian Basin, the heart of American shale, bore the brunt of the freeze, accounting for 1.5 million bpd of the total losses. While production began to recover on Monday—with shut-ins easing to roughly 700,000 bpd—full restoration isn’t expected until January 30. Furthermore, several refineries along the Gulf Coast reported operational issues due to the extreme cold, raising concerns about a temporary squeeze on fuel supplies even as crude prices dipped.

Geopolitics and the “Trump Factor”

The geopolitical landscape remains a primary source of the “risk premium” currently baked into oil prices. Tensions in the Middle East have intensified following the arrival of a U.S. aircraft carrier and supporting warships in the region. Market sentiment is particularly sensitive to the administration’s stance on Iran. President Donald Trump recently referred to a naval “armada” heading toward the region, renewing warnings against Tehran regarding its nuclear program. While the President expressed hope that military force would not be necessary, the possibility of sanctions or intervention targeting Iranian oil flows—which currently stand at approximately 3.2 million bpd—keeps a floor under prices.

OPEC+ and global outlook

Looking ahead, the market is turning its attention to the February 1 meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+). Early reports suggest that the group is likely to maintain its current pause on oil output increases through March. While supply disruptions in Kazakhstan (due to power distribution issues) and the U.S. freeze have tightened the market in the short term, the long-term forecast remains cautious. Organizations like the EIA and various analysts suggest that 2026 may eventually see a surplus as global production growth—particularly from non-OPEC sources like Canada and Guyana—outpaces demand growth.

Key support levels to watch

For technical traders, WTI is currently testing critical support levels. Analysts point to the $60.32 mark (the 50 percent Fibonacci retracement) as a “line in the sand.” If prices hold above this level, the bullish momentum seen earlier in the week may resume; however, a break below $59.99 could signal a deeper correction.