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Oil prices rose on Tuesday, supported by renewed geopolitical tensions and easing political uncertainty in the US, though lingering concerns over global oversupply kept gains in check.

Brent crude settled $1.10 higher or 1.72% at $65.16 a barrel.

WTI gained 91 cents or 1.51% to close at $61.04.

Traders weighed the implications of new US sanctions targeting Russian energy exports, which have begun to disrupt parts of the market. Russia’s Lukoil reportedly declared force majeure at an Iraqi oilfield it operates — the most significant operational setback linked to the sanctions so far. The move heightened expectations of tighter supply in the short term, particularly for refined fuels.

Sentiment also improved after the US Senate approved a funding compromise that could bring an end to the country’s longest-ever government shutdown. The potential resolution lifted demand outlooks slightly, with expectations that a reopened government would restore broader economic activity.

Still, the market’s upside remained capped by ongoing worries about excess crude supply. OPEC+ recently agreed to raise December output by 137,000 barrels per day but signalled a pause in further increases during the first quarter of next year. The alliance has collectively boosted production by around 2 million bpd since April, and discussions within the group about unwinding additional voluntary cuts after the pause suggest that supply could expand by another 1 million bpd in the year ahead.

Written by: Farid Muzaffar