Oil prices edged down slightly on Tuesday, as investors balanced geopolitical risks against weakening economic fundamentals. The decline followed a U.S. announcement that it may sell Venezuelan oil it has seized, while Ukrainian attacks on Russian vessels and ports raised further concerns about potential supply disruptions.
Brent crude futures fell by 13 cents, or 0.2%, to $61.94 per barrel, while West Texas Intermediate (WTI) crude slipped 14 cents, or 0.2%, to $57.87 per barrel. The market had posted a strong gain on Monday, with Brent rising more than 2% in its best daily performance in two months, and WTI seeing its largest gain since mid-November.
Markets remain cautious amid geopolitical concerns, with tensions between the United States and Venezuela combined with hostilities in the Black Sea between Russia and Ukraine contributing to worries about supply interruptions. Earlier in the week, U.S. President Donald Trump indicated that the U.S. may retain or sell oil recently seized from tankers off the coast of Venezuela. This statement forms part of ongoing pressure on Venezuela through sanctions targeting its oil shipments.
Barclays expects oil markets to adjust to reduced Venezuelan exports in the short term given ample global supply. However, the bank notes that the global oil surplus is projected to shrink to 700,000 barrels per day in the final quarter of 2026, heightening concerns about tightening supplies in the future. Any prolonged disruption could put additional pressure on markets.
In another development, Russia Ukraine tensions flared further in the Black Sea, a crucial energy export route. Russian forces attacked the Ukrainian port of Odesa late Monday, damaging port infrastructure and a commercial vessel marking the second assault in less than 24 hours. Ukraine, in turn, targeted Russian oil tankers with drones, causing a fire in a village in Russia’s Krasnodar region.
Markets are closely monitoring these geopolitical developments, with ongoing political and economic volatility continuing to pressure oil prices. Tensions in the Black Sea and potential military escalation in Venezuela remain key factors shaping short term price expectations.
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