Oil prices rose on Monday, as supply disruptions related to escalating tensions between the US and Venezuela outweighed concerns about oversupply and the impact of a potential peace agreement between Russia and Ukraine, UNN reports with reference to Reuters.
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Brent crude futures rose 33 cents, or 0.54%, to $61.45 a barrel as of 04:29 GMT (06:29 Kyiv time), while US West Texas Intermediate crude rose 31 cents, or 0.54%, to $57.75.
Both contracts fell by more than 4% last week under pressure from expectations of a surplus in 2026.
"Peace talks between Russia and Ukraine are fluctuating between optimism and caution, while tensions between Venezuela and the US are escalating, raising fears of potential supply disruptions," said Tsuyoshi Ueno, senior economist at NLI Research Institute.
"However, as markets lack clear direction, fears of oversupply remain strong, and if geopolitical risks do not escalate sharply, WTI crude oil prices could fall below $55 early next year," he said.
According to shipping data, documents and maritime sources, Venezuela's oil exports have sharply declined after the US seized a tanker early last week and imposed new sanctions on shipping companies and vessels doing business with the Latin American oil producer.
The market is closely monitoring developments and their impact on oil supply. Reuters reported that the US plans to intercept more vessels carrying Venezuelan oil after seizing a tanker this week, increasing pressure on President Nicolas Maduro.
US prepares to seize new tankers with Venezuelan oil - Reuters12.12.25, 05:22 • [views_24539]
However, growing expectations of a surplus continue to put pressure on prices.
A JPMorgan Commodities Research report on Saturday said that the oil surplus in 2025 is expected to continue growing in 2026 and 2027, as global oil supply is projected to outpace demand, increasing three times faster than the rate of demand growth by 2026.
As the publication writes, "Ukrainian President Volodymyr Zelensky offered to abandon his country's aspiration to join the NATO military alliance during five-hour talks with American envoys in Berlin on Sunday." The talks are to continue on Monday.
US representative Steve Witkoff stated that "significant progress has been made," although additional details were not disclosed.
"Significant progress has been made" - Witkoff on talks in Berlin14.12.25, 22:56 • [views_41389]
On Friday, a large Russian oil refinery in Yaroslavl, northeast of Moscow, was reported to have been hit; industry sources said the plant had suspended production.
According to Reuters calculations published on Friday, Russian state sector oil and gas revenues in December are likely to almost halve compared to the same period last year, amounting to 410 billion rubles ($5.12 billion) due to lower oil prices and a stronger ruble.
A possible peace agreement could eventually increase the supply of Russian oil, which is currently under Western sanctions.
Regarding supply, US energy companies cut the number of active oil and gas rigs for the second time in three weeks last week, energy services firm Baker Hughes said on Friday.