High oil prices
Brent crude rose 1.7% in the last session, its biggest daily gain in a week. Traders are focused on Venezuela after President Nicolás Maduro was removed. US officials plan to meet energy companies to discuss reviving the country’s oil production. The Middle East is also affecting oil markets. Israel said it will not allow Iran to rebuild its ballistic missile program. While tensions are raising concerns, analysts say these events are unlikely to drive long-term price increases.
Experts' say
Ben Luckock, global head of oil at Trafigura Group, said that events in Venezuela, Iran, and Ukraine are unlikely to cause big gains. He told Bloomberg that any oil Venezuela can return to the market this year is “very, very few.” Venezuela now produces less than 1% of the world’s oil after years of underinvestment. This limits its ability to influence global prices.
Global supply
The world is facing a surplus of oil. Saudi Arabia has reduced crude prices to Asia for three months in a row. Morgan Stanley expects the surplus to continue through the first half of 2026, peaking mid-year. The bank has lowered its oil price forecasts for the first three quarters of the year.
Only US company in Venezuela
Chevron is the only US company currently operating in Venezuela under special permission. US Energy Secretary Chris Wright will meet oil executives this week to discuss ways to revive production. President Donald Trump said the US may provide funding to rebuild the country’s oil industry. Optimism about these plans pushed US energy company shares higher in early trading.
