Oil prices fluctuate amid Middle East tensions... WTI closes slightly lower on the first trading day

New York oil prices experienced sharp fluctuations on the first trading day of 2026, closing slightly lower. Geopolitical concerns surrounding the Middle East unsettled the market, but as there was no direct supply disruption, prices fluctuated within a limited range.

On January 2 local time, the West Texas Intermediate (WTI) crude oil for February delivery traded on the New York Mercantile Exchange closed at $57.32 per barrel, down $0.1 from the previous trading day (a decline of 0.17%). Intraday, oil prices initially rose by up to 0.89%, with the deepest decline reaching -1.43%, and intraday volatility exceeding 2 percentage points, but ultimately failed to establish a clear direction, hovering around flat.

The background of this oil price fluctuation is related to remarks by U.S. President Donald Trump regarding Iran. President Trump reiterated a tough stance on the anti-government protests in Iran, stating that if peaceful demonstrations are suppressed by force, the U.S. may intervene. He warned on his social media platform Truth Social, “If Iran again violently suppresses protesters, we are ready to move in and rescue them.”

These remarks heightened overall tensions in the Middle East, prompting the market to consider potential risks to oil supply. Iran is one of the major oil exporters, and the region around the Strait of Hormuz is a critical transit route for oil transportation. Additionally, the escalation of conflicts between Saudi Arabia and the United Arab Emirates over Yemen further increased concerns that instability in the Middle East could impact future supply systems.

Against this backdrop, the market is paying close attention to the results of the upcoming OPEC and non-OPEC oil-producing countries alliance “OPEC+” meeting scheduled for January 4. The market widely expects that the meeting is likely to postpone production increase plans. Sparta Commodities chief analyst Jon Gorton said, “Traders are increasingly expecting OPEC+ to continue its pause on production increases in the first quarter.”

This move is expected to ease concerns over oversupply and partially offset the upward pressure on oil prices caused by geopolitical risks. However, the market remains cautious, believing that if geopolitical tensions actually lead to a disruption in crude oil supply, oil prices could surge in the short term.