Tokyo: Oil prices rose on Monday as investors reacted to growing tensions between the United States and Venezuela, sparking concerns that crude supplies from the South American nation could face further disruption.
Brent crude and US West Texas Intermediate prices gained modestly after falling sharply last week, with traders reassessing geopolitical risks linked to fresh US enforcement actions against Venezuelan oil shipments. The market move reflected fears that tougher measures could reduce exports from Venezuela, which has already been struggling under long standing sanctions.
The latest concerns follow the recent seizure of a Venezuelan linked oil tanker by US authorities in international waters. Washington has indicated it may take similar action against other vessels suspected of breaching sanctions, a development that has unsettled oil traders and shipping firms involved in the region.
Venezuela has strongly condemned the move, calling it illegal and warning that further actions could escalate diplomatic tensions. The country relies heavily on oil exports for foreign revenue, and any additional restrictions are expected to put pressure on already fragile output and shipments.
Despite the uptick, oil prices remain under pressure from broader market factors. Weak global demand growth, ample supply from major producers, and uncertainty over the global economic outlook have limited stronger gains. Traders are also watching developments related to the Russia Ukraine conflict and expectations around US interest rate policy, both of which continue to influence energy markets.
Analysts say that in the short term, prices are likely to remain volatile, driven by headlines around sanctions and enforcement actions. However, without a sustained supply shock or stronger demand signals, the overall upside for oil prices may stay limited.
For now, markets are balancing geopolitical risks against persistent concerns over oversupply, keeping oil prices moving cautiously higher but well below levels seen earlier this year.