Amid escalating domestic unrest in Iran, crude oil prices continue to rise. Reports indicate that Brent crude futures surged by approximately 1.9%, reaching around $65.08 per barrel, close to the two-month high set the previous trading day. Meanwhile, WTI crude rose by about 2.4% to $60.74 per barrel, hitting a stage high not seen since December of last year.
BCA Assessment: Stability of Regime Tested, Supply Shock Probability Returns to 40%
In its January 12 report, BCA Research noted that Iran is experiencing its largest anti-government demonstrations in years, with protest intensity described as surpassing the 2019-2020 levels and nearing those of 2022-2023. The agency believes that protests might further escalate due to the regime losing some public trust over the past decade, and during the transition period for Supreme Leader Khamenei’s successor, the opposition might see a "rare opportunity."
Within this framework, BCA has revised its assessment of the probability of a "significant global oil supply shock" back to about 40%, emphasizing that this falls within the risk range previously indicated.
Risk Spillover: Military Threats and Shipping Routes Become Market Focus
As unrest spreads, reports mention new mutual military threats between the US and Iran: the US has warned Iran against using force on protesters, claiming it will "rescue" those harmed by the regime; Iran, in turn, has warned the US and Israel against taking action, stating that it will not only target US bases but also regional shipping. The market widely believes that if tensions disrupt transport and export routes, oil price volatility could be further amplified.
