Oil Prices Ease After Strong Rally as Venezuela and Black Sea Tensions Shape Outlook

BY COMFORT OGBONNA

Oil prices edged lower in early Asian trading on Tuesday after posting sharp gains in the previous session, as markets reacted to fresh comments from the United States about potentially selling seized Venezuelan crude while closely monitoring escalating military activity around the Black Sea that could threaten supply routes.

Brent crude futures slipped 11 cents, or 0.18%, to trade at $61.96 a barrel by 0100 GMT, while U.S. West Texas Intermediate crude fell 13 cents, or 0.22%, to $57.88 a barrel. The modest pullback followed a strong rally on Monday, when both benchmarks climbed more than 2%. Brent recorded its strongest daily gain in two months, and WTI posted its biggest one-day rise since mid-November, reflecting growing geopolitical risk premiums.

Prices had been buoyed by heightened uncertainty surrounding Venezuela’s oil exports after U.S. President Donald Trump said Washington could either keep or sell Venezuelan crude seized in recent weeks as part of its pressure campaign against the country. The U.S. has intensified enforcement of sanctions, including what Trump described as a “blockade” on sanctioned oil tankers entering or leaving Venezuela.

“Maybe we will sell it, maybe we will keep it,” Trump said on Monday, adding that the seized oil could potentially be used to replenish the United States’ strategic petroleum reserves. He also reiterated his stance that it would be better for Venezuelan President Nicolas Maduro to step aside, reinforcing expectations of continued political and economic pressure on the South American oil producer.

Despite the near-term tensions, analysts caution that global oil supplies are likely to remain relatively comfortable in the first half of 2026, even if Venezuelan exports were to drop sharply. Barclays noted that oil markets would probably stay well supplied during that period, although the bank warned that the current surplus is expected to narrow significantly later on.

According to Barclays estimates, the global oil surplus could shrink to around 700,000 barrels per day by the fourth quarter of 2026. A prolonged disruption from Venezuela or other key producers could tighten the market further, potentially erasing recent inventory builds and leaving prices more vulnerable to supply shocks.

At the same time, traders are keeping a close eye on intensifying conflict between Russia and Ukraine, particularly around the Black Sea, a crucial corridor for energy and commodity exports. Russian forces struck Ukraine’s Black Sea port of Odesa late on Monday, damaging port infrastructure and a vessel in what marked the second attack on the area within 24 hours.

Ukraine, in turn, launched a drone attack that damaged two vessels and two piers in Russia’s Krasnodar region, igniting a fire in a nearby village, according to regional officials. Kyiv has increasingly targeted Russia’s maritime logistics, including so-called shadow-fleet oil tankers used to circumvent international sanctions imposed over the nearly four-year war.

With geopolitical risks rising on multiple fronts, the oil market remains cautious. Traders are balancing fears of potential supply disruptions against forecasts of ample global supply in early 2026, leaving prices sensitive to any escalation or prolonged interruption that could upset the fragile balance.