Oil Prices Rise Dramatically, Driven by Venezuelan Blockade and US Attacks on Nigeria
Oil prices posted their biggest weekly gain since late October, driven by geopolitical tensions and a partial US blockade of crude oil shipments from Venezuela. Brent, the global benchmark, traded above $62 per barrel, up more than 3% for the week, while West Texas Intermediate (WTI) hovered above $58 per barrel. The blockade was exacerbated by the US decision to focus its efforts on blocking oil shipments from Venezuela, with sanctioned tankers turning away from the South American country.
Trump's policy aims to tighten sanctions on the Venezuelan government, which is already under pressure from the economic blockade. Sources familiar with the situation said that US forces will be almost entirely focused on the Venezuelan oil blockade in the next two months, replacing military options. Although oil prices are pressured by the prospect of a global surplus by 2026, these geopolitical tensions are providing strong price support.
In addition, tensions in Nigeria are adding to the price pressure. US President Donald Trump announced military strikes against the ISIS terrorist group in northwestern Nigeria, threatening more attacks if ISIS does not halt its offensive. Nigeria, an OPEC member, produced about 1.5 million barrels of oil per day in November, and these tensions have the potential to worsen global oil supply.
Amid this uncertainty, oil prices also received support from stronger-than-expected US economic data. However, with the Christmas holiday keeping markets quiet, a slight decline in oil prices is expected in the coming days, unless geopolitical tensions persist.
Meanwhile, a weaker US dollar has supported oil prices, making raw materials cheaper for global buyers. The Bloomberg Spot Dollar Index fell 0.7% this week, supporting the surge in oil prices.
Meanwhile, in Europe, Ukrainian President Volodymyr Zelenskiy revealed his plans to meet with President Trump soon to discuss efforts to end Russia's war. This suggests that tensions in Europe are also increasingly influencing energy market dynamics.
In other market developments, despite strengthening oil prices, Brent is expected to remain on track for its biggest annual decline since 2020. Global oversupply remains a major concern, with traders expecting increased supply from producing countries outside OPEC+ next year. (asd)
Source: Newsmaker.id
