Oil Prices Steady in Early 2026, OPEC+ & Venezuela Leading
Oil prices held steady on the first trading day of 2026 after posting their biggest annual decline since 2020. Market participants are now weighing two main factors: the approaching OPEC+ meeting and re-escalating geopolitical risks.
The US benchmark WTI held above $57 per barrel after weakening ahead of the New Year holiday, while the global benchmark Brent closed below $61. These movements reflect a market that remains cautious after intense pressure throughout 2025.
Most attention is focused on the OPEC+ meeting on January 4 (via video conference). Key members, led by Saudi Arabia and Russia, are expected to stick to their November decision to temporarily halt further supply increases.
On the geopolitical front, President Donald Trump's administration is said to be increasing pressure on Venezuelan oil exports by imposing sanctions on companies in Hong Kong and mainland China, including vessels accused of evading restrictions.
Tensions are also growing from the Russia-Ukraine conflict, which saw each other attack ports in the Black Sea over the New Year period. The attack reportedly damaged infrastructure, including a refinery, adding to the risk of energy supply and logistics.
Despite geopolitical support, the market remains clouded by the issue of global oversupply. Oil fell by about a fifth last year due to concerns about a glut after OPEC+ briefly increased supply and rival production also increased. The IEA estimates a surplus of around 3.8 million barrels per day for this year.
According to Robert Rennie (Westpac), geopolitical events could support oil prices in the short term, but prices could remain depressed in the first quarter due to oversupply and the possibility of progress towards a Ukraine peace deal. Regarding Venezuela, Russia has also reportedly made a diplomatic request for the US to halt its pursuit of the Bella 1 tanker in the Atlantic. In morning trading in Singapore, WTI Feb was around $57.45, while Brent Mar closed down 0.8% at $60.85.
5 key points
- Oil stabilized in early 2026 after its deepest annual drop since 2020.
- The OPEC+ meeting on January 4 is expected to maintain a pause on supply increases.
- The US is increasing pressure on Venezuela through sanctions on companies and related vessels.
- Russia-Ukraine's attack on Black Sea ports adds to geopolitical risks.
- The main sentiment remains oversupply; the IEA projects a surplus of ~3.8 million bpd this year.
Source: Newsmaker.id
