Trump weighs options with Iran
January 30, 2026
Energy prices rose again in yesterday’s trading due to concerns of a US and Iran conflict, the EIA reporting a surprise drop in US crude oil inventories for the week ending January 23rd, and the US dollar falling to a new 4-year low.
US sources said President Donald Trump is weighing options against Iran that include targeted strikes on security forces and leaders to inspire protesters, even as Israeli and Arab official said air power alone would not topple the clerical rulers.
A US official said the US Navy has sent an additional warship to the Middle East, amid a large military buildup in the region and increasing tensions.
It should not come as a surprise as the US and Iran tensions seem to be rising that Iran’s Revolutionary Guard naval forces will carry out live-fire exercises in the Strait of Hormuz on February 1st and 2nd.
The run up in prices over the last few weeks has been more risk premium getting put into the markets as US and Iran tension rise. This geopolitical news is also happening the mist of the normal seasonal cycle that sees price trend higher.
Citi analysts said that the potential of a military strike against Iran has escalated the geopolitical premium of oil prices by $3 to $4 per barrel. It added that further geopolitical escalation could push prices to as high as $72 per barrel for Brent over the next three months.
There are reports that China plans to add 170 million barrels to it crude inventories this year. Its buying last year was a key reason that crude prices did not fall further than they did. China’s continued buying will put a damper on the expected crude oil surplus this year and again help to prevent a major selloff for crude prices.
Reports say that President Trump has selected Kevin Warsh as the next Fed Chair. If he is confirmed by the Senate, he would replace Jerome Powell.