Oil prices have begun the new year on a positive note, with Brent crude futures and U.S. West Texas Intermediate (WTI) both ticking higher. As of 0409 GMT on Friday, Brent rose 35 cents to $61.20 a barrel, while WTI increased 34 cents to $57.76 a barrel.
This modest gain follows the steepest annual loss for oil since 2020, as both Brent and WTI fell nearly 20 % in 2025. The market’s current direction is shaped by a mix of geopolitical developments. Ukrainian drones have targeted Russian oil facilities, and the United States has imposed a blockade on Venezuela’s exports. Russia and Ukraine continue to trade accusations of attacks on civilians even as U.S.-mediated talks proceed. Kyiv has stepped up strikes on Russian energy infrastructure to cut off financing for Moscow’s military campaign. Recently, the U.S. sanctioned four companies and related oil tankers operating in Venezuela’s oil sector, adding pressure on President Nicolás Maduro. The blockade forces state energy firm PDVSA to seek alternatives to avoid shutting down refineries because of growing residual fuel inventories.
Looking ahead, the oil market is expected to remain volatile. Short‑term geopolitical risks coexist with longer‑term fundamentals that point toward oversupply. OPEC and its allies (OPEC+) will meet virtually on 4 January to discuss production levels, and analysts anticipate that the group will keep output hikes on hold during the first quarter, a move that could support prices. The International Energy Agency projects that global production will exceed demand by 3.84 million barrels per day next year, heightening oversupply concerns. Meanwhile, China is likely to keep building crude stockpiles in the first half of the year, providing a price floor.
In the United States, oil output reached a record 13.87 million barrels per day in October, according to the Energy Information Administration. As these dynamics unfold, 2026 will be a pivotal year for evaluating OPEC+ decisions and their impact on global oil supply.
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