If you’ve looked at the pump or your brokerage account this morning, things look a little different than they did last week. Honestly, the energy market was practically asleep at the wheel throughout most of December. But today, Tuesday, January 13, 2026, the "geopolitical risk premium" decided to wake up and kick down the door.
What is the cost of oil today? As of mid-day trading, West Texas Intermediate (WTI) crude futures have surged to roughly $61.15 per barrel, while Brent Crude, the international benchmark, is hovering around $65.46.
These aren't just random numbers on a screen. We are looking at a two-month high. Just a few days ago, WTI was struggling to stay above $57. Now, we’ve cleared the $60 psychological barrier, and traders are scrambling.
The Flare-Up in the Strait of Hormuz
Basically, the biggest reason for this sudden spike is a massive dose of Vitamin Tension. Markets hate uncertainty, and right now, the Middle East is providing plenty of it. On Monday, January 12, reports surfaced of a confrontation in the Strait of Hormuz involving a U.S. Navy vessel and several Iranian fast-attack boats.
When warning shots are fired in a waterway that handles about 20% of the world's petroleum, the price of oil doesn't just "drift" up. It jumps. This specific event has forced hedge funds to recalibrate their "tail-risk" scenarios—the "what if" situations that could lead to a broader maritime conflict.
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A Tale of Two Benchmarks
If you're wondering why there are two different prices, you aren't alone. It’s one of those things that seems unnecessarily complicated but actually makes a lot of sense when you break it down.
- WTI (West Texas Intermediate): This is the U.S. standard. It's "light" and "sweet," meaning it's low in sulfur and easy to refine into gasoline. Today, it’s trading at $61.15, up nearly 3% in a single session.
- Brent Crude: This comes from the North Sea but is used to price about two-thirds of the world's oil. It’s currently at $65.46.
The "spread" between these two—the difference in price—usually tells us something about shipping costs or regional gluts. Right now, Brent is carrying a higher premium because it’s more sensitive to those Middle Eastern shipping risks we just talked about.
Is this a "Super-Glut" or a Shortage?
Earlier this month, the U.S. Energy Information Administration (EIA) released a report suggesting that 2026 would be the year of the surplus. They forecasted Brent to average around $56 for the year because global production is currently outpacing demand.
Goldman Sachs analysts recently echoed this, pointing to a potential 2.3 million barrel-per-day surplus emerging. So, why is the price going up? Because the market is a living, breathing thing that reacts to now, not just eventually. While the long-term outlook might be a "flush" market, the immediate threat of a physical disruption in the Persian Gulf overrides the "inventory build" narrative.
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What This Means for Your Wallet
You’ve probably noticed that when oil prices go up, gasoline follows like a shadow.
RBOB Gasoline futures are currently sitting at approximately $1.83 per gallon. By the time you add taxes, distribution, and the station owner’s margin, that usually translates to a national average at the pump that feels a lot more painful.
If WTI stays above $65 for a sustained period, experts like those at UBS suggest we could see a ripple effect through the entire economy. Airlines like United, which have been banking on lower fuel costs for their 2026 guidance, might have to start looking at those "fuel surcharge" buttons again.
The Role of OPEC+
On January 4, OPEC+ (the group led by Saudi Arabia and Russia) reaffirmed they were keeping production flat for the first quarter. They’re playing a waiting game. They know the U.S. is producing record amounts of crude—near 14 million barrels per day—and they don’t want to lose market share by cutting too deep.
However, they also aren't exactly rushing to flood the market and crash the price. They need the revenue. It’s a delicate balancing act between keeping the price high enough to pay the bills but low enough that it doesn't kill global demand or trigger even more U.S. shale drilling.
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Real-World Factors Driving Today’s Price
It’s not just the Navy shots. There are layers to this.
- Internal Unrest in Iran: Protests across 31 provinces have weakened the rial, leading to fears of a domestic crackdown that could interfere with oil infrastructure.
- U.S. Strategic Moves: The current administration has prioritized lower energy prices to fight inflation, but they won't intervene to "save" the market unless WTI drops below $50—the point where shale drillers start to go broke.
- The China Factor: China has been quietly building record strategic inventories. If they decide they have enough and stop buying, the floor could drop out of the market regardless of what happens in the Strait.
Actionable Insights for Navigating Oil Volatility
If you’re trying to figure out how to handle these swings, don't just look at the daily headlines. Here is how to actually use this information:
- Watch the $60 Level: For WTI, $60 is a major technical and psychological line. If it closes above this for three straight days, the "bears" (people betting on lower prices) will likely give up, and we could see a run toward $70.
- Monitor the Spread: If the gap between Brent and WTI starts to widen significantly (past $5 or $6), it’s a sign that international shipping risks are becoming the dominant driver, rather than local supply issues.
- Check the "Cracks": In the industry, we look at "crack spreads"—the difference between the price of crude and the price of the products made from it (like gas and diesel). If crude goes up but gasoline doesn't, refineries will slow down, which eventually forces the price of crude back down.
- Hedge Your Bets: If you run a business dependent on fuel, this is the time to look at fixed-price contracts. Waiting for the "super-glut" to bring prices back to $50 is a gamble when warships are involved.
The current rally is a stark reminder that while the math says we have plenty of oil, the world is a volatile place. Fundamentals might set the floor, but geopolitics almost always sets the ceiling. Stay tuned to the daily "closing" price around 2:30 PM EST; that’s when the real direction for the rest of the week is usually set.