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President Trump is sending a clear message to the Iranian protesters: “Help is on the way!” In a fiery post on Truth Social, Trump urged the demonstrators to keep fighting against the regime, promising U.S. support while canceling all meetings with Iranian officials. This comes amid reports of a brutal crackdown that’s left over 2,500 dead, according to human rights groups like HRANA. The death toll includes protesters, security forces, and even children, marking the bloodiest unrest since the 1979 revolution. Trump’s warning has the market on edge — could this escalate into something that disrupts Iran’s 3.3 million barrels per day of crude output? If so, we’re talking about a serious squeeze on global supply.

Adding to the tension, NATO Secretary General Mark Rutte blasted Iran’s leadership for waging “war on its own people” with “massive force and massive violence.” Rutte highlighted widespread reports of deaths and condemned the regime’s brutalities, stressing the killings of peaceful protesters. This international outcry from NATO underscores the geopolitical stress points that could ripple through energy markets. Iran’s currency is tanking, protests are spreading like wildfire, and the mullahs are pointing fingers at “monarchists” and foreign agitators. But with Trump back in the Oval Office, the U.S. seems ready to flex—remember last year’s strikes on Iran’s nuclear sites? The regime backed down then, knowing a full confrontation would be lights out for their military.

Meanwhile, OPEC+ is playing it coy, showing real reluctance to ramp up production despite earlier plans. At their latest meeting, the group—led by Saudi Arabia, Russia, and the UAE—decided to pause any increases through the first quarter of 2026, citing seasonality and a desire to keep the market balanced. OPEC’s own data points to a tight supply-demand match this year, with demand for their crude averaging around 43 million bpd, pretty much in line with output. But analysts like the IEA are still waving the “glut” flag, forecasting surpluses up to 3 million bpd if non-OPEC players like the U.S., Brazil, and Guyana keep pumping strong. Trump’s “drill baby drill” policies are already boosting U.S. permits, and with Venezuela resuming some exports under U.S. oversight, the supply picture is mixed. Yet, if tensions with Iran boil over, that reluctance from OPEC could turn into a lifeline for prices. Call Phil Flynn at 888-264-5665.

Oil prices are feeling the heat, climbing for the fifth straight session on these supply disruption fears. WTI settled up around $61.66 a barrel, while Brent hit $66.22—both hovering near three-month highs. Citi’s even bumping their Brent forecast to $70 in the next few months, baking in that geopolitical risk premium. On the products side, gasoline and distillates are holding firm, but watch for any Strait of Hormuz drama—that could send everything soaring.

The EIA’s latest Short Term Energy Outlook is painting a rather gloomy picture, folks. They’re dialing down their oil demand forecast while ramping up production predictions. According to the EIA, we can expect global oil prices to dip in 2026 as production outstrips demand, leading to a rise in inventories. This trend is set to continue into 2027, albeit at a slower pace. They forecast the Brent crude oil price will average $56 per barrel in 2026, a significant drop from 2025’s $65, before settling at $54 in 2027.

Global production of liquid fuels is expected to rise by 1.4 million barrels per day in 2026 and another 0.5 million bpd in 2027. The growth in 2026 is primarily driven by OPEC+, while 2027’s increase is expected to come from non-OPEC countries, mainly in South America. The forecast assumes that existing sanctions on Venezuela will remain in place through 2027. U.S. crude oil production, after hitting an annual record of 13.6 million bpd in 2025, is projected to decline slightly by less than 1% in 2026 and by 2% in 2027. This drop is attributed to sustained lower crude oil prices, which are expected to slow down drilling activity more than any gains in productivity. The West Texas Intermediate price is forecasted to average $52 per barrel in 2026 and $50 in 2027.

Retail gasoline prices in the U.S. are also expected to fall in 2026 and 2027, reflecting the anticipated lower crude oil prices. The EIA predicts an average of just over $2.90 per gallon in 2026, nearly 20 cents less than 2025, with prices remaining mostly flat in 2027. Trump will love that but will want them lower.

Natural gas prices at Henry Hub are forecasted to average just under $3.50 per million British thermal units in 2026, down 2% from 2025, and then rise to $4.60 in 2027. This increase is driven by demand growth, particularly from expanding liquefied natural gas exports and higher consumption in the electric power sector, outpacing production growth.

Electricity consumption is set to grow by 1% in 2026 and 3% in 2027, marking the strongest four-year period of growth since the turn of the century. This rise is largely due to increased power demand in the commercial and industrial sectors.

Solar power is expected to see the largest increase in electricity generation, with 69 gigawatts of new capacity additions during the forecast period, leading to a 21% increase in solar generation in both 2026 and 2027. Natural gas generation is predicted to remain flat in 2026 and rise by 1% in 2027, while generation from coal-fired power plants is expected to fall by 9% in 2026, with a slight decrease in 2027.

The latest EIA weekly report for the week ending January 2 shows U.S. crude refinery inputs ticking up to 16.9 million bpd, with utilization at 94.7%. Gasoline production dipped to 9.0 million bpd, but distillates jumped. Crude stocks rose by 5.3 million barrels, signaling a looser balance, but the situation with Iran remains a wildcard.

Natural gas, on the other hand, is cooling off—prices fell to $3.26 per MMBtu, down over 4% as milder weather forecasts for late January ease demand worries. Storage drew down 119 Bcf to 3,256 Bcf, which is below last year but above the five-year average. With LNG capacity set to surge 7% this year and Permian output strong, we’re looking at a well-supplied market. But hey, if that arctic blast shows up uninvited, prices could flip faster than a politician’s promise.

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