Oil prices moved higher on Monday as supply risks linked to rising tensions between the United States and Venezuela outweighed persistent concerns about global oversupply and the potential impact of a Russia-Ukraine peace agreement.
Brent crude futures rose 30 cents, or 0.49%, to $61.42 a barrel by 07:25 GMT. U.S. West Texas Intermediate crude also gained 0.49%, up 28 cents at $57.72 a barrel. Both benchmarks had fallen more than 4% last week amid growing expectations of an oil surplus in 2026.
According to Tsuyoshi Ueno, a senior economist at NLI Research Institute, markets remain caught between geopolitical risks and oversupply fears. He noted that uncertainty surrounding Russia-Ukraine peace talks, combined with escalating U.S.-Venezuela tensions, has increased the risk of supply disruptions. However, he added that without a sharp escalation in geopolitical tensions, oversupply concerns could push WTI prices below $55 early next year.
Venezuela’s oil exports have declined sharply after the United States seized a tanker last week and imposed new sanctions on shipping firms and vessels linked to the country’s oil trade. Shipping data and maritime sources indicate that these measures have significantly disrupted Venezuelan crude flows.
Markets are closely watching further developments, after Reuters reported that the United States may intercept additional vessels carrying Venezuelan oil, increasing pressure on President Nicolas Maduro’s government.
Despite these supply risks, expectations of rising global oil surpluses continue to cap price gains. JPMorgan Commodities Research said in a note that oil surpluses are likely to widen from 2025 into 2026 and 2027, as global supply growth is projected to outpace demand by a wide margin.
Geopolitical developments in Eastern Europe also remain in focus. Ukrainian President Volodymyr Zelenskiy said he was willing to drop Ukraine’s bid to join NATO during lengthy talks with U.S. officials in Berlin, with negotiations set to continue. U.S. envoy Steve Witkoff said progress had been made, though details were not disclosed.
Meanwhile, Ukraine’s military reported an attack on a major Russian oil refinery in Yaroslavl, northeast of Moscow. Industry sources said the facility had suspended operations following the strike.
Russia’s state oil and gas revenues are expected to fall sharply in December, dropping nearly 50% from a year earlier due to lower crude prices and a stronger rouble, according to Reuters calculations. Any eventual peace deal could lead to higher Russian oil supply, much of which remains under Western sanctions.
On the U.S. supply front, energy companies reduced the number of active oil and gas rigs for the second time in three weeks, according to data from Baker Hughes, signaling some restraint in domestic production growth.
