Oil Prices Jump as Trump’s Venezuela Blockade Raises Supply Risk Premium

Oil prices rose more than 1% as U.S. President Donald Trump ordered a blockade of sanctioned oil tankers entering and leaving Venezuela, easing concerns about a growing global crude surplus. Brent crude settled up 1.3% at $59.68 a barrel, while WTI gained 1.2% to $55.94, rebounding from near five-year lows reached earlier amid hopes of progress in Russia-Ukraine peace talks. The move followed last week’s U.S. seizure of a Venezuelan tanker, though analysts said the blockade may add only short-term risk premiums since Venezuelan crude accounts for about 1% of global supply and some flows, including Chevron shipments, continue. Price gains were capped by rising U.S. fuel inventories, with gasoline stocks up 4.8 million barrels and distillates up 1.7 million barrels last week, even as crude inventories fell by 1.3 million barrels. Uncertainty also persists over how the blockade would be enforced and how many tankers would ultimately be affected.

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Venezuela Oil Exports Resume Cautiously as US Blockade Threat Leaves 15m Barrels Stranded

Venezuela’s state oil company PDVSA has resumed loading crude and fuel cargoes after a cyberattack, but most exports remain stalled as the US threatens to enforce a blockade on sanctioned tankers. Crude shipments have fallen sharply from more than 900,000 bpd in November, with about 15 million barrels of oil now stuck on vessels in Venezuelan waters amid fears of seizure. Chevron continues shipping Venezuelan crude to the US under a sanctions waiver, while roughly 38 of the 75 “shadow fleet” tankers in the country have been sanctioned, many operating with transponders switched off. Oil prices rose more than 1% on concerns that tighter enforcement could further disrupt Venezuela’s exports, most of which are bound for China. PDVSA says operations are returning to normal, but cyber-related disruptions, tanker turnarounds and demands for deeper discounts highlight ongoing instability in the country’s oil trade.

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US Weighs Fresh Energy Sanctions on Russia as Peace Talks Hang in the Balance

The United States is preparing a new round of potential sanctions targeting Russia’s energy sector, including its shadow tanker fleet and oil traders, if President Vladimir Putin rejects a peace deal with Ukraine. The measures could be announced as early as this week, though any final decision rests with President Donald Trump, the White House said. Oil prices briefly rose on the news, even as existing sanctions have already pushed Russian crude prices to their lowest levels since the 2022 invasion. The discussions come amid reported progress in US-Ukraine talks on security guarantees, while major sticking points remain over territory, frozen Russian assets and nuclear facilities. Despite diplomatic signals, Moscow has shown little indication it is ready to compromise on its territorial demands or end the war.

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Ukrainian Drone Strikes Disrupt Lukoil’s Caspian Offshore Production

Ukraine said it attacked Lukoil’s Grayfer field in the Caspian Sea with drones, damaging an offshore gas platform and halting output from 14 wells. The strike follows recent drone attacks on Lukoil’s Filanovsky and Korchagin fields, marking an escalation in Kyiv’s campaign against Russian energy infrastructure. Ukraine aims to curb Moscow’s war revenues by targeting refineries, terminals, offshore platforms and tankers, while Russia has intensified strikes on Ukraine’s power network, causing prolonged blackouts. The three Caspian offshore fields together represent nearly 11% of Lukoil’s domestic production capacity if operating at full output. Lukoil has not commented, and Bloomberg could not independently verify the claims.

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Russian Urals Crude Piles Up Near China as India Cuts Imports

Tankers carrying Russia’s Urals crude are accumulating off China’s east coast after India, the grade’s largest buyer, reduced purchases amid tighter Western sanctions. At least five vessels holding about 3.4 million barrels were idling in the Yellow Sea, the highest level for the grade in the region in over five years. The buildup is unusual because Chinese refiners typically favor Russian crude from eastern ports, but sellers are seeking alternative buyers after sanctions on Rosneft and Lukoil and increased US scrutiny of India-bound flows. India’s Urals imports are expected to drop to about 800,000 bpd this month from a peak of 2 million bpd in June. It remains unclear whether the cargoes off China have already been sold or are still being actively marketed.

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Canadian Oil Sands Producers Press Ahead with Output Growth Despite Looming Glut

Canada’s major oil sands producers, including Cenovus, Canadian Natural Resources, Suncor and Imperial Oil, plan to raise production in 2026 despite expectations of a global crude oversupply and weak prices. Cenovus forecasts the biggest increase, about 18%, driven by its acquisition of MEG Energy and expansions at existing assets. Producers are capitalizing on surplus pipeline capacity, including the expanded Trans Mountain system and planned Enbridge network upgrades to U.S. markets. The added supply could worsen what the International Energy Agency sees as an unprecedented global oil surplus, already contributing to a 22% drop in U.S. benchmark prices this year. As the world’s fourth-largest crude producer, Canada’s output growth is set to play a significant role in global supply dynamics.

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Europe’s Fuel Market Momentum Fades as Margins and Prices Weaken

Europe’s fuel markets are losing momentum, with diesel, gasoline and jet fuel margins easing and reducing support for crude prices toward year-end. Diesel premiums to crude have fallen to a two-month low, while forward curves across oil products signal weakening market tightness compared with November’s sanction-driven strength. Analysts say earlier geopolitical fears encouraged refiners to run hard, boosting output and now pressuring prices. This downturn in fuel margins coincides with falling oil prices, creating a double hit to petroleum product values, even though margins remain above seasonal norms. Market direction will depend on refinery run rates, upcoming EU sanctions on fuels made from Russian oil, and the potential impact of a Russia-Ukraine peace deal.

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Israel Clears Landmark Gas Export Deal with Egypt to Bolster Regional Energy Ties

Israel has approved a $35 billion agreement to export natural gas to Egypt from 2026 to 2040, marking the largest gas deal in the country’s history. Prime Minister Benjamin Netanyahu said the pact, covering 130 billion cubic meters of gas, strengthens Israel’s role as a regional energy power and supports regional stability. The deal involves increased gas supplies from the offshore Leviathan field operated by Chevron, after earlier delays over pricing and licensing concerns were resolved. Israeli officials estimate the agreement will generate around 58 billion shekels in tax and royalty revenues and more than 16 billion shekels in infrastructure investment. For Egypt, the long-term supply could ease its reliance on costly LNG imports as domestic gas production has fallen short of rising demand.