Oil Prices Climb in Asian Trade as Venezuela Sanctions and Middle East Tensions Fuel Risk Premium

Oil prices edged higher in early Asian trading on Monday, rebounding after two consecutive weeks of losses, as geopolitical risks and potential supply disruptions lifted market sentiment. Brent crude futures for February rose around 0.6% to trade near $60.85 per barrel, while West Texas Intermediate crude futures advanced by a similar margin to approximately $56.86 per barrel. The gains came as traders reacted to reports that the United States was pursuing a third Venezuelan oil tanker, following the seizure of another vessel over the weekend.

According to multiple reports, Washington has intensified its enforcement actions against Venezuelan oil shipments, marking its third such interception in less than two weeks. The move follows a tougher stance by the administration of President Donald Trump, which has recently escalated rhetoric against Caracas. U.S. officials have accused Venezuela of contributing to illegal drug trafficking and criminal activity entering the country. Last week, President Trump announced a blockade targeting all sanctioned oil tankers entering or leaving Venezuela, raising concerns about disruptions to the country’s oil exports.

Any sustained crackdown on Venezuelan crude flows could have broader implications for global oil supply. Venezuela holds the world’s largest proven oil reserves and ranks among the top crude producers globally, making it a key player in energy markets despite years of sanctions and underinvestment. The prospect of reduced supply from Venezuela helped offset bearish pressures tied to expectations of a supply glut in 2026 and the potential return of Russian oil exports amid peace talks related to the Ukraine conflict.

Adding to the upward momentum in oil prices were renewed concerns over Middle East geopolitics. Reports over the weekend suggested that Israel was preparing to brief the United States on possible military action against Iran, heightening fears of regional instability. Israeli Prime Minister Benjamin Netanyahu is expected to meet President Trump later this month, with discussions likely to focus on Iran’s nuclear ambitions and ballistic missile program. While it remains uncertain whether further action will materialize, any escalation involving Iran could threaten oil production and transport routes in the region, keeping a risk premium firmly priced into crude markets.