BY COMFORT OGBONNA
Oil prices climbed modestly on Monday, recovering a portion of last week’s sharp losses, as growing geopolitical risks involving Venezuela and the United States helped counter persistent concerns about excess global supply and uncertainty surrounding a potential peace deal between Russia and Ukraine.
Brent crude futures rose 25 cents, or 0.4%, to $61.37 a barrel in early Asian trading, while U.S. West Texas Intermediate crude gained 23 cents, or 0.4%, to $57.67 a barrel. The rebound followed a roughly 4% decline last week, when worries about oversupply and demand softness weighed heavily on the market.
Market participants remained focused on the evolving geopolitical landscape, which has been marked by shifting expectations around the Russia-Ukraine conflict and rising tensions in Latin America. Analysts noted that optimism over peace talks has repeatedly given way to caution, keeping traders wary of making large directional bets.
Peace negotiations between Russia and Ukraine appeared to make incremental progress over the weekend, with Ukrainian President Volodymyr Zelenskiy signaling a willingness to drop his country’s long-standing ambition to join the NATO military alliance. The proposal came during lengthy talks with U.S. envoys in Berlin on Sunday, with further discussions scheduled to continue on Monday. U.S. envoy Steve Witkoff said meaningful progress had been achieved, though he declined to provide specific details.
Despite diplomatic developments, the conflict continues to affect energy infrastructure. Ukraine’s military said on Friday that it had struck a major Russian oil refinery in Yaroslavl, northeast of Moscow, prompting the facility to suspend output, according to industry sources.
At the same time, Russia’s state oil and gas revenue for December is expected to drop by nearly half compared with a year earlier, reflecting lower crude prices and the impact of a stronger rouble. Any eventual peace agreement could pave the way for increased Russian oil exports, much of which are currently restricted by Western sanctions, adding to longer-term supply concerns.
Attention has also turned to Venezuela, where political and diplomatic tensions have intensified. Opposition leader Maria Corina Machado on Friday vowed sweeping political change after reportedly leaving the country in secret to receive the Nobel Peace Prize. Her remarks followed heightened fallout from the U.S. government’s seizure of a Venezuelan oil tanker last week, a move that has deepened strains between Washington and Caracas.
Venezuela’s oil exports have dropped sharply in the wake of the tanker seizure and the imposition of new sanctions targeting shipping companies and vessels involved in transporting the country’s crude. Shipping data, official documents, and maritime sources indicate that the measures have disrupted exports, raising fears of further supply constraints from the OPEC member.
However, analysts cautioned that broader market fundamentals remain challenging. Oversupply concerns persist, particularly as global demand growth remains uneven and non-OPEC production stays robust. Adding to the mixed outlook, U.S. energy companies reduced the number of active oil and gas rigs for the second time in three weeks, according to data released by Baker Hughes, signaling some restraint in future output growth.
With no clear catalyst to decisively shift sentiment, traders are weighing geopolitical risks against underlying supply pressures. Analysts warned that unless tensions escalate significantly, crude prices especially U.S. benchmarks could face renewed downward pressure in the coming months.
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