Are Rising Tensions in Venezuela and Russia About to Push Oil Prices Higher?

Source: Kapitales Research

Highlights:

• Crude oil prices extended gains as geopolitical tensions in Venezuela and Russia heightened concerns over potential supply disruptions.
• At the time of writing, Brent crude was changing hands near US$60 a barrel as investors weighed mounting concerns over global supply.
• Possible production shut-ins in Venezuela and the threat of fresh US sanctions on Russia’s energy sector added upward pressure on prices.

Crude Extends Gains on Supply Fears

Crude oil prices moved higher as escalating geopolitical tensions in key producing regions raised concerns about potential supply disruptions. At the centre of the rally were developments in Venezuela and Russia, both of which are adding fresh uncertainty to the global energy market.

At the time of writing, Brent crude was trading around US$60 per barrel, extending recent gains as traders reassessed supply risks against an already fragile demand outlook.

Venezuela Blockade Raises Production Risks

Market attention has been drawn to Venezuela after the US blockaded sanctioned oil tankers attempting to dock in the country. According to reports, storage facilities and oil tankers are filling rapidly, increasing the risk that exports could be choked off in the near term. Once storage capacity is reached, state-owned producer Petróleos de Venezuela could be forced to shut in production, a scenario that would further tighten global supply. Adding to the uncertainty, oil companies have reportedly told the White House they have little appetite to return to Venezuela even if President Nicolás Maduro were to step down.

Maduro, meanwhile, offered no clear direction on future policy steps during a recent televised address, leaving markets without reassurance on how the situation may evolve.

Russia Sanctions Back in Focus

Supply concerns are also intensifying in Russia as diplomatic efforts to end the war in Ukraine continue to stall. Analysts at ANZ said the US is preparing additional sanctions targeting Russia’s energy sector, which could further restrict exports already under pressure from existing measures.

Any tightening of sanctions on Russian oil flows would have significant implications for global supply balances, particularly as some buyers remain dependent on discounted Russian barrels.

Oil Market Balancing Act

At the time of writing, traders appeared to be weighing rising geopolitical risks against broader economic signals, including global growth and demand expectations. While oil prices remain well below recent highs, the latest developments highlight how quickly sentiment can shift. With supply risks mounting in multiple regions, the oil market is once again on alert, as investors watch closely to see whether these tensions translate into sustained price strength in the weeks ahead.

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