Rising Oil Prices Driven by Geopolitical Tensions Stretching from Venezuela to Russia

SadaNews - Oil prices have risen after U.S. President Donald Trump escalated the blockade imposed on Venezuela by sending elements of the U.S. Coast Guard aboard an oil tanker and pursuing another, following weeks after the first seizure operation of a ship.

Brent crude rose towards $61 per barrel after experiencing two consecutive weekly losses, while West Texas Intermediate was traded near $57.

U.S. Coast Guard forces boarded the "Centuries" tanker in the Caribbean Sea on Saturday, which was loaded with about two million barrels of Venezuelan crude oil.

The United States is also pursuing the "Bella 1" tanker, which was on its way to the Latin American country.

Washington continues to escalate pressure on Nicolas Maduro's government, as Trump seeks to strangle the main source of revenue for the regime.

The U.S. has also designated the regime as a "foreign terrorist organization," accusing it of involvement in drug trafficking. Venezuela still holds the largest crude oil reserves in the world, but its exports, most of which go to China, now represent less than 1% of global demand.

Ukraine Intensifies Attacks

At the same time, tensions have also escalated regarding supplies coming from another OPEC member and OPEC+ coalition, after Ukraine targeted for the first time a tanker belonging to the Russian "shadow fleet" in the Mediterranean using drones. This followed strikes targeting Lukoil's facilities in the Caspian Sea.

Geopolitical tensions have supported oil prices, which have fallen by nearly a fifth this year. These declines were driven by expectations of a surplus in supply, with the OPEC+ coalition increasing production at a faster pace than expected, while other countries are also increasing their output, and demand remains weak.

Robert Renni, head of commodity research at Westpac Banking Corp, stated: "We maintain our slightly more optimistic outlook on crude oil through the end of the year, based on geopolitical developments that have become much more supportive." However, he added that Brent crude is likely to decline to the $50 range next year.