Muscat: Oil prices rose for a fifth straight session on Tuesday, with Brent crude climbing above $62 a barrel and US benchmark WTI reclaiming the $58 mark after recently dipping below $55. The rebound follows a sharp sell-off last week that had pushed prices to early-2021 lows.
The earlier slide was driven by expectations of a potential peace agreement between Russia and Ukraine, which raised hopes that Russian oil could return to global supply chains. However, those expectations were tempered as geopolitical risks resurfaced.
In the Caribbean, the United States intensified efforts to disrupt crude exports from Venezuela, which accounts for less than 1% of global oil supply. US authorities seized two Venezuelan oil tankers in the Caribbean Sea and warned of further interceptions of sanctioned vessels entering or leaving the country, aiming to curb oil flows and cut revenue to the Maduro government.
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The US naval action has reportedly affected several sanctioned tankers linked to Russia, weighing on export expectations and lending support to the recent price rebound. Speaking on the seizures, US President Donald Trump said the US would either keep or sell the seized oil and could also retain the ships.
Adding to supply concerns, Ukraine carried out a drone strike on Russia’s Volna terminal in the Krasnodar region, disrupting a key energy hub near the Crimean Bridge, a critical route for Russian military supplies and energy exports. Kyiv has also targeted Russia’s so-called “shadow fleet” of tankers, which are believed to be used to bypass Western price caps. These developments have dented hopes of an imminent peace deal and raised the risk of tighter supplies through alternative export routes.
Market dynamics have further magnified the move. Trading volumes have thinned due to the Christmas holidays, while Commodity Trading Advisors have begun covering short positions. Until Monday, such funds were fully short on both Brent and WTI; that exposure has since eased to about 91%.
Despite the rebound, the broader picture remains weak. WTI crude is still down around 19% so far in 2025, putting it on track for its worst annual performance since 2020, underscoring how fragile the recovery remains amid shifting geopolitics and uncertain demand.
