Oil steadies amid balance between geopolitical risks and negative fundamental factors

Oil prices were largely steady on Tuesday, as markets weighed the possibility that the United States could sell Venezuelan oil it has seized against rising concerns over supply disruptions following Ukrainian attacks on Russian ships and ports.

Brent crude futures rose 6 cents to $62.13 per barrel by 12:21 GMT, while US West Texas Intermediate (WTI) crude edged up 2 cents to $58.03 per barrel.

Prices had climbed more than 2% on Monday, with Brent posting its biggest daily gain in two months, while WTI recorded its largest rise since November 14.

“The market appears to be caught between bearish factors linked to abundant supply and the latest supply-side concerns stemming from the US blockade that is reducing Venezuelan oil loadings and exports, as well as the exchange of strikes between Russia and Ukraine that targeted ships and ports late on Monday,” said Janiv Shah, an analyst at Rystad.

US President Donald Trump said on Monday that the United States may keep or sell the oil it has seized off the coast of Venezuela in recent weeks, as part of measures that include imposing a “blockade” on sanctioned oil tankers entering or leaving the South American country.

Barclays said in a note dated Monday that oil markets are expected to remain oversupplied during the first half of 2026. However, the bank added that the surplus is projected to narrow to about 700,000 barrels per day in the fourth quarter of 2026, noting that any prolonged supply disruption could lead to tighter market conditions.

On the ground, Russian forces shelled Ukraine’s Black Sea port of Odesa late on Monday, damaging port facilities and a vessel, marking the second attack on the area in less than 24 hours. In response, Ukrainian drone attacks damaged two ships and two piers and sparked a fire in a village in Russia’s Krasnodar region.

Ukraine has also targeted Russia’s maritime logistics infrastructure, focusing on oil tankers belonging to the so-called “shadow fleet,” which is used to circumvent sanctions imposed on Russia.