Geopolitical Tensions Drive Oil Prices Higher
Global oil markets saw a significant uptick in trading on Thursday, driven by rising geopolitical tensions across multiple regions, raising concerns among traders about potential supply disruptions.
Brent crude futures rose by 0.4% to $62.48 per barrel, while U.S. West Texas Intermediate crude increased by 0.6% to $58.79 per barrel during Asian trading hours.
This rise followed the U.S. announcement regarding the seizure of a large oil tanker off the coast of Venezuela, with President Donald Trump stating, "We just seized a tanker off the coast of Venezuela... a very large tanker... in fact, the largest of all, and there are other things happening."
In a separate but related development, reports of Ukrainian drones attacking a tanker involved in Russian oil trade in the Black Sea contributed to the bullish market outlook.
Market analyst Tony Sycamore from IG noted that the price movements came "after reports of the U.S. seizure of a tanker off the coast of Venezuela," adding that the attack in the Black Sea "provided additional support for prices."
Sycamore predicted that this impact would likely continue, stating, "These developments are likely to keep crude prices above the key support level of $55 through the end of the year, unless an unexpected peace agreement is reached in Ukraine."
In this context, market participants reported that Asian buyers are demanding significant discounts on Venezuelan crude imports due to the influx of sanctioned oil from competitors like Russia and Iran, alongside heightened operational risks in Venezuela due to increased U.S. military presence nearby.
Separately, investors are closely monitoring ongoing discussions regarding the Ukrainian crisis, particularly following a conference call involving leaders from the UK, France, and Germany with President Trump, which they described as a "decisive moment" in the political landscape.
