Crude Oil Climbs as U.S. Action Near Venezuela Rekindles Supply Fears

Key Moments

Brent crude futures rose 46 cents, or 0.8%, to $60.93 per barrel, while WTI gained 46 cents, or 0.8%, to $56.98 by 0400 GMT.
U.S. authorities pursued an oil tanker in international waters off Venezuela, in what could mark the third such move in less than two weeks.
Geopolitical tensions related to Venezuelan oil flows and Russia-Ukraine developments helped offset persistent oversupply worries.

Prices Edge Higher on U.S. Tanker Interception

SINGAPORE, Dec 22 (Reuters) – Crude futures advanced on Monday after officials reported that the United States had intercepted an oil tanker in international waters near Venezuela, injecting fresh uncertainty into the supply outlook.

By 0400 GMT, Brent crude futures were up 46 cents, or 0.8%, at $60.93 per barrel. U.S. West Texas Intermediate (WTI) crude futures gained 46 cents, or 0.8%, to trade at $56.98.

Contract	Price	Change	Percent Change	Time (GMT)
Brent crude futures	$60.93	$0.46	0.8%	0400
WTI crude futures	$56.98	$0.46	0.8%	0400

Harder Line on Venezuelan Oil Trade

“The market is waking up to the fact that the Trump administration is taking a hardline approach to the Venezuelan oil trade,” said June Goh, senior oil market analyst at Sparta Commodities.

Goh added that prices have drawn support from the latest geopolitical headlines, even as market fundamentals remain weak. “Oil prices have thus been supported by this geopolitical news alongside the simmering Russian-Ukraine tensions in the background in an otherwise very bearish market fundamentally,” said Goh.

Series of U.S. Maritime Operations Near Venezuela

Officials told Reuters on Sunday that the U.S. Coast Guard is actively pursuing an oil tanker in international waters close to Venezuela. If the effort is completed, it would be the second operation of its kind over the weekend and the third in under two weeks. The White House did not immediately provide a comment.

Geopolitics Counterbalancing Oversupply Concerns

IG analyst Tony Sycamore said that the latest price rebound has been fueled by a series of geopolitical developments. These began with U.S. President Donald Trump’s declaration of a “total and complete” blockade on sanctioned Venezuelan oil tankers and subsequent actions, followed by “reports of a Ukrainian drone strike on a Russian shadow fleet vessel in the Mediterranean Sea.”

“The market is losing hope that the U.S.-brokered Russia-Ukraine peace talks will reach a lasting agreement any time soon,” he said.

“These developments are helping to offset ongoing oversupply concerns, and combined with the false break lower last week which has caught the market on the wrong foot, the balance of risks is very close to shifting back toward the upside in crude oil.”

Market Performance in Recent Weeks

Brent and WTI each declined about 1% last week, following losses of about 4% during the week of December 8.

Mixed Signals From Russia-Ukraine Peace Efforts

U.S. special envoy Steve Witkoff said on Sunday that talks held over the previous three days in Florida among U.S., European and Ukrainian representatives, aimed at ending Russia’s war in Ukraine, had centered on aligning positions. He described those discussions, along with separate engagements with Russian negotiators, as productive.

However, the top foreign policy adviser to Russian President Vladimir Putin said on Sunday that modifications introduced by European and Ukrainian counterparts to U.S. proposals had not improved the outlook for a peace agreement.