US Seizes Tanker, Oil Prices Rise, But Why Remain Depressed?
Oil prices continued their rally after the United States seized a sanctioned tanker off the coast of Venezuela, sparking concerns about supply disruptions and escalating geopolitical tensions. WTI for January delivery rose about 0.6% to around $58.79 per barrel in Asia, while Brent for February held above $62.21 per barrel. The seizure of this super-large tanker is seen as a serious move by Washington toward Caracas and could further disrupt oil shipments from Venezuela.
Venezuela itself is no small player: it holds the world's largest oil reserves and exported about 586,000 barrels per day last month, with most of that going to China. Some of Chevron's production from the OPEC nation still flows to the US, and the company says its operations are operating normally so far. Meanwhile, Ukraine has again increased pressure on Russia's energy export network by attacking a "shadow fleet" of vessels linked to Russian oil trade. This means that since the end of last month, there have been at least five attacks on Russian-linked vessels, automatically increasing the risk premium for war and sanctions in the oil market.
However, despite the escalating geopolitical tensions, the oil market is facing bearish fundamentals. Production increases from OPEC+ and the Americas are projected to outpace sluggish demand growth and have the potential to create a "super glut," or a significant oversupply, in the near future. Analysts such as Robert Rennie of Westpac believe that while the risk of war and sanctions will add to the price premium in the short term, pressure from the supply surplus is expected to keep Brent within the $60–$65 per barrel range for now, with downward pressure likely to intensify towards 2026.
US oil stockpile data also provides additional insight into the market. US crude inventories fell by around 1.8 million barrels in the past week, indicating continued absorption from demand or exports. However, stocks at the Cushing, Oklahoma, WTI delivery point have risen again after four weeks of declines, although they remain at their lowest level since 2007 for the same period in a year. The combination of escalating geopolitical tensions and the threat of a supply glut in the coming years is what has driven oil prices upwards, but they remain confined within a tight range. (asd)
Source: Newsmaker.id
