Oil markets recorded gains at the beginning of the week, supported by mounting geopolitical concerns, particularly between the United States and Venezuela. Brent crude for February delivery settled at $63.17, up 1.27%, while West Texas Intermediate (WTI) rose 1.32% to $59.32 for the same month.
Diplomatic tensions over Venezuela
Investors are closely monitoring the escalating conflict between Washington and Caracas, as U.S. President Donald Trump accuses the Venezuelan government of facilitating drug trafficking into the United States. Caracas denies the allegations, claiming Washington’s true objective is regime change and access to the country’s substantial oil reserves.
According to estimates by Global Risk Management, Venezuela currently produces about one million barrels per day, with roughly half allocated for export. A disruption of this output could impact up to 1% of global supply, explaining the market’s reaction, despite an anticipated surplus in global oil availability in the coming months.
Oil infrastructure targeted in the Black Sea
Simultaneously, naval drone attacks carried out by Ukraine damaged an oil facility at a Russian port on the Black Sea coast. While Russian exports have not yet been disrupted, the incident has fuelled speculation about possible future supply interruptions.
Analysts note that only a significant disruption in Russian oil flows could trigger a sharp price increase. For now, Russian crude continues to reach international markets, easing immediate supply concerns.
Monitoring talks on the Ukraine conflict
Market participants are also following diplomatic negotiations aimed at resolving the conflict between Russia and Ukraine. U.S. envoy Steve Witkoff is scheduled to meet with Russian President Vladimir Putin in Moscow to advance an American peace proposal.
Ukrainian President Volodymyr Zelensky has stated his intention to discuss key aspects of the plan directly with Donald Trump. A de-escalation of the conflict could reduce the current risk premium reflected in oil prices.
