Oil edged higher as market weighs supply risks in Venezuela and Russia

Crude oil prices settled marginally higher on Thursday as a tightening US naval blockade of Venezuela and the threat of fresh sanctions on Russia’s energy sector reintroduced a geopolitical risk premium to a market pressured by oversupply fears.

Brent crude futures gained 14 cents, or 0.2%, to settle at $59.82 a barrel. 

WTI rose 21 cents, or 0.4%, to close at $56.15.

The upward movement was sparked by a US maritime blockade targeting Venezuelan exports. Market intelligence suggests that with storage facilities nearing maximum capacity, state-owned PDVSA may be forced to "shut-in" production if tankers remain unable to depart for primary markets in China. While two unsanctioned very large crude carriers (VLCCs) were reportedly cleared to sail for Asia, the potential disruption of 600,000 barrels per day (bpd) continues to support prices near four-year lows.

Sentiment was further bolstered by reports that the US is finalising a new sanctions package targeting Russia’s "shadow fleet" and energy infrastructure, contingent on the outcome of a high-stakes peace summit scheduled for this weekend. This follows the UK’s decision on Thursday to sanction Russian oil entities Tatneft and Russneft.

However, gains remained capped by a significant 4.8-million-barrel build in US gasoline inventories—double the expected amount—and persistent record production of 13.8 million bpd. Analysts noted that while geopolitical tension provides a short-term floor, a projected global surplus in 2026 continues to weigh on the long-term outlook.

Written by: Aiman Haikal