Crude Navigates Choppy Waters as Venezuela Supply Fears Weigh on Markets

Oil prices maintained their upward momentum on Tuesday within volatile trading conditions, with markets digesting fresh concerns about potential supply disruptions stemming from Venezuela, which holds the world’s most substantial proven oil reserves. Brent crude futures climbed 0.2 percent to settle at $61.90 per barrel, while WTI futures edged higher by 0.2 percent to $58.42, continuing the previous session’s $1 barrel advance.

Geopolitical Tensions Drive Market Sentiment

U.S.-Venezuela relations continue to create friction in energy markets. President Donald Trump emphasized that military confrontation is not on the table, though he stressed that political stabilization in Venezuela must precede any electoral processes. The Trump administration signaled potential cooperation in rehabilitation of Venezuela’s energy infrastructure and indicated willingness to support oil sector reconstruction efforts, including possible assistance to companies engaged in infrastructure restoration projects.

The current Venezuelan oil output hovers between 800,000 and 1.1 million barrels per day, representing roughly 1 percent of global supply. While immediate repercussions to worldwide supply chains have been contained so far, market participants remain cautious about escalating consequences if the political situation deteriorates further.

Supply Pressures Mount as Saudi Arabia Adjusts Strategy

Amid broader apprehension regarding oversupply in the market, Saudi Arabia has initiated defensive pricing tactics. Saudi Aramco, the state-owned petroleum corporation, reduced its February Arab Light crude pricing for Asian purchasers for the third consecutive month. The company set Asian prices at a premium of $0.30 per barrel relative to the Oman/Dubai benchmark, marking a sharp decline from the previous month’s $0.60 premium spread.

This pricing adjustment reflects the industry’s grappling with supply-demand equilibrium concerns and the shifting landscape of production strategies across major producers. The choppy price action underscores the tension between supply uncertainty from geopolitical risks and the persistent challenge of managing inventory levels in an increasingly complex market environment.