Oil Extends Rally on U.S. Storm Disruptions and Rising Middle East Tensions

Oil prices edged higher on Wednesday, extending strong gains from the previous session as supply concerns persisted after a winter storm curtailed U.S. output and exports, while escalating Middle East tensions added a fresh risk premium.

Brent crude rose 0.2% to $67.68 a barrel, while U.S. West Texas Intermediate gained 0.3% to $62.58. Both benchmarks had surged about 3% on Tuesday.

Analysts estimate that U.S. producers lost up to 2 million barrels per day over the weekend, roughly 15% of national output, as the storm strained energy infrastructure. Exports of crude and liquefied natural gas from Gulf Coast ports fell to zero on Sunday, according to shipping data.

Supply risks were compounded by disruptions in Kazakhstan, where the giant Tengiz field is expected to restore less than half of normal production by early February following a fire and power outage. Although the Caspian Pipeline Consortium said its Black Sea terminal has returned to full capacity, the slow recovery at Tengiz continues to support prices.

Geopolitical risk also remained elevated after a U.S. aircraft carrier and supporting warships arrived in the Middle East, reinforcing concerns that Washington could take military action against Iran. Analysts warned that any escalation could threaten regional oil flows.

Looking ahead, OPEC and its allies are expected to maintain their pause on output increases for March at a February 1 meeting, adding another layer of support to the market.

While expectations of a global supply surplus this year may cap gains, the combination of weather-related disruptions and geopolitical uncertainty is keeping crude prices underpinned for now.