Oil prices edge higher as US–Venezuela tensions rekindle supply concerns

Oil prices rose on Monday, recovering part of last week’s losses, as worries over possible supply disruptions linked to escalating tensions between the United States and Venezuela outweighed ongoing concerns about global oversupply and uncertainty surrounding Russia–Ukraine peace talks.

Brent crude futures climbed 0.4% to $61.37 a barrel, while U.S. West Texas Intermediate gained 0.4% to $57.67 a barrel in early Asian trading.

Analysts said geopolitical risks were again influencing market sentiment. Tsuyoshi Ueno, a senior economist at NLI Research Institute, noted that while negotiations between Russia and Ukraine have alternated between optimism and caution, deteriorating relations between Washington and Caracas have raised fears of oil supply disruptions. He added that oversupply concerns remain strong and, without a sharp escalation in geopolitical risks, WTI prices could fall below $55 early next year.

Diplomatic efforts to end the war in Ukraine continued over the weekend. Ukrainian President Volodymyr Zelensky said he was prepared to drop his country’s bid to join NATO during extended talks with U.S. officials in Berlin. U.S. envoy Steve Witkoff said progress had been made, though no details were provided, and negotiations were expected to continue.

Despite the talks, fighting has persisted. Ukraine’s military said on Friday it had struck a major Russian oil refinery in Yaroslavl, northeast of Moscow, prompting the facility to halt production, according to industry sources. Meanwhile, Russian oil and gas revenues for December are projected to fall sharply from a year earlier due to lower oil prices and a stronger rouble.

Markets are also weighing the possibility that a peace deal could eventually allow more Russian oil to return to global markets, as current exports remain constrained by Western sanctions.

In Venezuela, political tensions intensified after opposition leader Maria Corina Machado pledged political change following her secret departure from the country to receive the Nobel Peace Prize. The situation escalated further after the Trump administration seized a Venezuelan oil tanker last week.

Shipping data and industry sources indicate that Venezuela’s oil exports have dropped sharply in 2025 following the tanker seizure and the imposition of new U.S. sanctions on shipping companies and vessels linked to Venezuelan crude.

On the supply front, U.S. energy companies reduced the number of active oil and gas rigs for the second time in three weeks, according to Baker Hughes, offering some support to prices.