Oil prices were largely steady following the strong gains recorded in the previous session, as investors balanced concerns over a potential supply surplus against rising geopolitical tensions, while also awaiting the upcoming Federal Reserve meeting. Brent crude futures edged slightly lower to around $65.8 per barrel, while West Texas Intermediate (WTI) crude slipped to near $61 per barrel, after both benchmarks posted gains of more than 2% at the end of last week, driven by higher geopolitical risk premiums.
The main source of support for prices came from escalating political tensions, after the United States signaled a reinforcement of its military presence. U.S. President Donald Trump announced the deployment of a naval force, including an aircraft carrier, to the Middle East amid rising tensions with Iran. This move raised market concerns over potential disruptions to oil supplies from one of the world’s major producing regions. Geopolitical tensions related to Greenland also contributed to broader unease across financial markets, which spilled over into energy prices.
On the supply side, improved conditions helped cap further price gains after Kazakhstan’s main oil export route returned to full operational capacity. The Caspian Pipeline Consortium announced the resumption of loading operations at its Black Sea terminal following the completion of repairs at a mooring point, allowing exports to return to normal levels.
Despite geopolitical support, concerns persist over the longer term outlook for the oil market. Investors remain wary of a potential supply glut this year if production growth outpaces demand, particularly given the continued strength of output from countries outside the OPEC alliance. Against this backdrop, markets are closely watching the outcome of the Federal Reserve meeting, with expectations leaning toward interest rates being kept unchanged. Attention will focus on any signals regarding the timing of future rate cuts, given the impact of monetary policy on economic growth, the U.S. dollar, and ultimately global oil demand.
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