Oil prices climb as US-Venezuela tensions raise supply fears
Photo: Oil prices rise amid risks of supply disruptions from Venezuela (Getty Images)
Oil prices rose again as supply disruptions linked to escalating tensions between the United States and Venezuela outweighed concerns about oversupply and the potential impact of a peace deal between Russia and Ukraine, according to Reuters.
Brent crude futures rose by 33 cents, or 0.54%, to $61.45 per barrel, while US West Texas Intermediate crude gained 31 cents, or 0.54%, to $57.75 per barrel.
Both contracts fell by more than 4% last week amid expectations of oversupply in 2026.
"Peace talks between Russia and Ukraine have swung between optimism and caution, while tensions between Venezuela and the US are escalating, raising concerns about potential supply disruptions. Still, with markets lacking clear direction, oversupply concerns remain strong and unless geopolitical risks escalate sharply, WTI could fall below $55 early next year, " said Tsuyoshi Ueno, senior economist at NLI Research Institute.
According to the report, Venezuelan oil exports dropped sharply after the United States detained a tanker earlier last week and imposed new sanctions on shipping companies and vessels doing business with the Latin American oil producer.
Markets are closely monitoring developments and their impact on oil supply. Reuters reports that the United States plans to intercept more ships carrying Venezuelan oil, increasing pressure on President Nicolás Maduro.
At the same time, expectations of oversupply continued to weigh on prices.
Oil surpluses in 2025 are expected to grow further in 2026 and 2027, as global oil supply is forecast to exceed demand, growing three times faster than demand by 2026.
In addition, a potential peace agreement between Ukraine and Russia could ultimately increase supplies of Russian oil, which is currently under Western sanctions.
Escalation between the US and Venezuela
On December 10, US forces intercepted and took control of a sanctioned oil tanker near the coast of Venezuela.
The seizure could significantly complicate Venezuelan oil exports, as other carriers may avoid loading its cargoes due to the risk of sanctions.
Most Venezuelan oil is exported to China, typically through intermediaries and at steep discounts because of risks linked to US restrictions.
In addition, media reports indicate that the United States plans to intercept additional shipments of Venezuelan oil.
