WTI crude oil futures edged higher after spending much of the session under pressure, as markets recalibrated expectations following dramatic geopolitical developments in Venezuela. The capture of Venezuelan President Nicolás Maduro by US forces over the weekend marked a significant escalation in tensions, but the immediate impact on global oil supply remained limited. As a result, crude prices managed to recover modestly, reflecting a market more focused on near-term fundamentals than headline risk.

Venezuela Shock Fails to Disrupt Global Supply Balance

Despite Venezuela holding the world’s largest proven crude oil reserves, years of chronic underinvestment have sharply constrained its ability to export oil at scale. Infrastructure degradation, operational inefficiencies, and technical challenges tied to the country’s heavy and sour crude grades have significantly reduced its relevance in the global supply chain. Much of Venezuela’s limited exports have been directed toward Russia, Iran, and China—countries that have not sanctioned Caracas—leaving global benchmark markets largely insulated from sudden supply shocks.

The aggressive discount at which Venezuelan crude trades relative to WTI further limits its impact. For US and Western companies, the complexity and capital intensity required to extract and process such grades continue to pose substantial barriers, even amid regime change. As a result, traders largely viewed the geopolitical shock as symbolically significant but structurally contained.

OPEC+ Policy Anchors Market Expectations

Adding stability to the market, OPEC+ reaffirmed its commitment to keep output unchanged in the first quarter. That stance has provided a degree of predictability at a time when investors remain sensitive to supply-side surprises. While the cartel’s restraint has helped prevent sharper price declines, it has not been sufficient to trigger a sustained rally, especially as non-OPEC production remains elevated.

The broader oil market continues to grapple with an uneven demand outlook. Sluggish industrial activity in key economies and lingering concerns about global growth have tempered bullish enthusiasm, keeping prices range-bound despite intermittent geopolitical support.

Weak Annual Performance Keeps Sentiment Fragile

Although crude prices rose to around $58 per barrel, the broader performance picture remains challenging. Over the past year, oil prices are still down more than 20%, underscoring how persistent oversupply and muted demand expectations have weighed on the market. Even month-to-month performance remains negative, highlighting how short-term rebounds have struggled to gain traction.

From a behavioral perspective, investors appear reluctant to chase upside moves, instead treating rallies as tactical opportunities rather than signals of a trend reversal. Risk management remains central, particularly for institutional players wary of renewed downside if macroeconomic conditions deteriorate or inventories continue to build.

Looking ahead, attention will remain focused on OPEC+ compliance, US inventory data, and any signs that Venezuelan output could meaningfully re-enter global markets. While geopolitical risk may continue to underpin prices at the margin, the oil market’s ability to sustain gains will ultimately depend on whether supply discipline and demand recovery can align more convincingly.