Oil markets remained largely steady on Tuesday as investors weighed geopolitical risks against ongoing bearish supply fundamentals. Heightened tensions from the Ukraine-Russia conflict and potential U.S. sales of seized Venezuelan crude contributed to a volatile backdrop for energy prices.

• Brent crude futures edged up 7 cents to $62.14 per barrel by 0959 GMT.
• U.S. West Texas Intermediate (WTI) crude rose 4 cents to $58.05 per barrel.

Geopolitical Tensions Support Oil Prices

Oil prices have been under pressure due to oversupply, but geopolitical events provided temporary support. Russian attacks on Ukrainian ports, including Odesa, damaged infrastructure and shipping vessels, while Ukrainian drone strikes targeted Russian oil logistics in the Krasnodar region, affecting shadow-fleet tankers attempting to bypass sanctions.

These developments raised concerns over potential disruptions in global oil shipments, offering a bullish counterpoint to oversupply concerns.

U.S. Venezuelan Oil Seizures Add Market Uncertainty

U.S. President Donald Trump indicated that the United States could either retain or sell 1.9 million barrels of Venezuelan crude seized in December, adding further uncertainty to market expectations.

“Following Monday’s sharp rise in oil prices, heavy oversupply is limiting further upside, especially during a curtailed holiday week with thin trading,” said IG analyst Axel Rudolph.

Supply and Demand Outlook

According to Barclays, oil markets are expected to remain well-supplied in the first half of 2026. However, the bank forecasts that the oil surplus could shrink to 700,000 barrels per day in Q4 2026, potentially tightening markets if geopolitical disruptions persist.

Despite temporary gains from geopolitical fears, floating storage remains at its highest since 2020, limiting sustained price increases in the near term.

Conclusion

Oil prices face a delicate balance between oversupply and geopolitical risk. While U.S. and Russian developments may support prices temporarily, the broader market remains well-supplied, keeping a lid on extended rallies. Traders will continue monitoring Venezuelan oil seizures, Russian-Ukraine conflict developments, and global storage levels for clues on next year’s oil price trajectory.