Oil Gains on Kazakhstan Disruptions, Slow Venezuelan Exports Signal Tighter Supply

Oil prices ended Wednesday higher, supported by optimism over tightening global supply after production was temporarily halted at two major oilfields in Kazakhstan and as Venezuela’s export recovery continued to lag.

Brent crude settled up 32 cents, or 0.5%, at $65.24 a barrel, while U.S. West Texas Intermediate rose 26 cents, or 0.4%, to $60.62. Both benchmarks had already climbed about 1.5% in the previous session.

The latest gains followed Kazakhstan’s decision to halt output at the giant Tengiz and Korolev fields on Sunday due to power distribution problems. The disruption is expected to last another seven to 10 days, according to industry sources cited by Reuters. Adding to concerns, oil from Kazakhstan’s massive Kashagan field has been redirected to the domestic market for the first time, after equipment at the Caspian Pipeline Consortium (CPC) terminal suffered serious damage in drone attacks.

Operator Tengizchevroil has declared force majeure on crude deliveries into the CPC system, underscoring the severity of the disruption and raising the risk of tighter supplies from one of OPEC+’s key producers.

At the same time, Venezuela’s efforts to restore exports have been slow. Shipments under a flagship $2 billion supply deal with the United States totaled just 7.8 million barrels as of Wednesday, according to vessel-tracking data and PDVSA documents. The muted flow highlights the challenges facing the state-run oil company in reversing recent production cuts.

Markets are now awaiting U.S. inventory data, with a Reuters poll pointing to a build of about 1.7 million barrels in crude stocks last week, alongside higher gasoline inventories and lower distillate supplies. The American Petroleum Institute is set to release its figures later Wednesday, followed by official government data on Thursday.

Providing some longer-term support, the International Energy Agency revised up its 2026 global oil demand growth forecast in its latest monthly report, signaling a slightly narrower surplus than previously expected.

Still, analysts cautioned that rising geopolitical tensions—particularly surrounding trade disputes—could dampen economic growth and weigh on energy demand. “These developments are adding to risk-off sentiment in markets,” said UBS analyst Giovanni Staunovo.