Oil prices ticked higher on Friday as escalating tensions between Washington and Caracas revived concerns about supply disruptions. The move follows the U.S. seizure of a sanctioned Venezuelan tanker earlier this week — an action that signaled a more aggressive enforcement stance and raised the likelihood of further interceptions in the coming days.

Brent crude rose 0.52% to $61.60 per barrel, while West Texas Intermediate gained 0.59% to $57.94. Despite the modest rebound, both major benchmarks remain more than 3% lower for the week, pressured by broader market caution and renewed optimism surrounding Russia-Ukraine peace negotiations.

Geopolitical Tensions Lift Prices, but Momentum Remains Weak

The prospect of additional U.S. seizures of Venezuelan crude has injected fresh geopolitical risk into oil markets. Traders have begun to price in potential delays in shipments and regional export disruptions, though the full impact on supply chains remains uncertain.

Earlier in the week, prices had slumped as investors bet that progress in Moscow-Kyiv peace talks could ease some of the geopolitical premium embedded in global crude. A potential agreement — still distant but increasingly discussed — would reduce perceived supply risks tied to Russian energy infrastructure.

Ukrainian drone strikes on a Lukoil-owned Caspian Sea platform on Thursday underscored the fragility of the region’s infrastructure, temporarily halting production and keeping geopolitical tensions in focus.

Fed Uncertainty Adds to Market Malaise

Crude fundamentals were further weighed down by macro uncertainty after the Federal Reserve cut interest rates and delivered messaging that investors viewed as less hawkish but also less decisive. The lack of clarity on the future rate path has dragged on broader risk appetite, contributing to the week’s soft performance in commodities.

U.S. inventory data also added to the mixed backdrop. A smaller-than-expected crude draw failed to counterbalance significant increases in gasoline and distillate inventories — a sign that refined product demand remains uneven.

Supply–Demand Forecasts Diverge Sharply

The International Energy Agency now expects global output to exceed demand by 3.84 million barrels per day in 2026, reinforcing expectations of an oversupplied market. While the figure is slightly lower than the prior forecast, it still signals surplus conditions that could cap price appreciation.

OPEC’s latest projections, by contrast, suggest a much tighter market with balanced supply and demand — a divergence that continues to influence sentiment and heighten uncertainty over medium-term fundamentals.

Analysts say that if Russia-Ukraine talks show credible progress, WTI could move toward the $55 range, adding further downside pressure in the weeks ahead.