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Oil prices were largely steady on Monday as markets weighed near-term supply risks tied to escalating U.S.–Venezuelan tensions against mounting expectations of a global crude surplus and the possibility of increased Russian exports should a Ukraine peace deal materialize.
Brent crude futures slipped 16 cents, or 0.26%, to $60.96 a barrel by 11:31 GMT, while U.S. West Texas Intermediate (WTI) crude fell 17 cents, or 0.3%, to $57.27 a barrel. Both benchmarks remain under pressure after losing more than 4% last week, driven by forecasts of excess global supply extending into 2026.
Venezuela sanctions tighten supply in the near term
On the supply side, concerns have intensified around Venezuela after U.S. authorities seized a tanker last week and imposed fresh sanctions on shipping companies and vessels linked to Venezuelan oil exports. According to shipping data and maritime sources, the measures have already triggered a sharp drop in the country’s crude shipments.
Markets are closely monitoring developments after reports that Washington plans to intercept additional vessels carrying Venezuelan oil, a move that would further constrain exports from the OPEC member and increase pressure on President Nicolas Maduro’s government.
Russia-Ukraine talks temper bullish momentum
Offsetting these near-term supply risks is growing optimism around diplomatic efforts to end the war in Ukraine. Ukrainian President Volodymyr Zelenskiy said on Sunday that Kyiv was willing to drop its bid to join NATO, following lengthy talks with U.S. envoys in Berlin. Negotiations are set to continue, with U.S. envoy Steve Witkoff describing the discussions as having made “a lot of progress,” albeit without providing specifics.
Any eventual peace agreement could pave the way for a gradual return of Russian oil flows to global markets, easing the impact of Western sanctions and adding to supply at a time when demand growth is already slowing.
Structural surplus outlook weighs on prices
Beyond geopolitical headlines, the dominant theme for oil markets remains oversupply. JPMorgan Commodities Research warned over the weekend that oil surpluses expected in 2025 are likely to widen further into 2026 and 2027, as global supply growth continues to outpace demand by a wide margin.
According to the bank, oil supply is projected to expand at roughly three times the pace of demand growth through 2026, reinforcing the view that rallies driven by geopolitical disruptions may struggle to gain traction unless accompanied by a material shift in production or consumption trends.
Overall, oil prices remain caught between short-term supply shocks and a structurally bearish medium-term outlook, leaving markets range-bound and highly sensitive to geopolitical and macroeconomic signals.
