Oil prices climbed by more than 2 per cent on Friday and were heading for a third consecutive weekly gain as tensions in major Opec members Venezuela and Iran stoked supply concerns.
Crude, which rallied 3 per cent at the close on Thursday, was also extending gains because of risks associated with US President Donald Trump's threat to impose tariffs of 500 per cent on countries that buy Russian oil, seeking to break the deadlock in Moscow's peace talks with Ukraine.
Brent, the benchmark for two thirds of the world's oil, gained 1.63 per cent to $63 a barrel at 6.35pm UAE time. West Texas Intermediate, the gauge that tracks US crude, added 1.85 per cent to $58.83 per barrel. They were up by as much as 2.5 per cent.
From last Friday’s close, Brent and WTI are on pace to jump nearly 4 per cent and 3 per cent, respectively. Crude prices fell about 20 per cent in 2025 as geopolitical and economic pressures affected markets.
Venezuelan gold rush
The US is considering more action against Venezuela, following the capture of President Nicolas Maduro on January 3. He has appeared in federal court in New York to face charges including drug trafficking.
After taking over Venezuelan oil assets, the US plans to sell 30 million to 50 million barrels of crude worth $2 billion in the markets. Mr Trump also plans to hold talks with American oil companies, which have been encouraged to enter Venezuela and develop its oil reserves – the largest in the world.
Relations between the Trump administration and Venezuela’s political and military leaders are critical variables that will determine the course of matters such as oil, said Jim Burkhard, vice president for oil markets at S&P Global.
But he does not expect the developments in Venezuela to alter S&P Global's view of a 1.4 million barrel per day global crude stock build in the first quarter of 2026. "There is risk relative to our outlook in the near term, both to the upside [up 200,000 bpd] and downside [down 350,000 bpd] in terms of production and exports, but not enough either way to significantly alter the global oil balance in the first quarter," Mr Burkhard said.
The White House intends to keep sanctions on Venezuelan oil in place as influence against the country's interim leadership. But the easing of sanctions would only allow Venezuelan crude production to return to its previous 1.1 million bpd level, analysts at London market intelligence firm Energy Aspects said.
Chevron, the only US oil company currently operating in Venezuela, and major trading houses Trafigura and Vitol are among the organisations reportedly competing to secure deals from Washington to export oil from Venezuela.
"Traders are closely watching for the potential impact of regime change on Venezuela’s oil production, reflecting hopes for a swift upswing ... however, excitement about a rapid rebound in Venezuelan oil output risks putting the cart before the horse," Energy Aspects said.
"Even with Mr Maduro gone, the path to recovery will be uneven. If Mr Trump is satisfied with how Venezuela acts over the next few weeks or months, he may start to reshape oil sanctions."
Iranian unrest
In Iran, protests over economic woes entered a 13th day on Friday amid a nationwide internet blackout, further increasing supply concerns. Iran is the world's seventh largest producer of crude.
Markets are also keeping an eye on the US Federal Reserve's monetary policy direction this year. Mr Trump has pushed for lower interest rates, arguing it would help to boost the world's largest economy.
The Fed's decisions remain a critical macro driver for oil markets in 2026, primarily through its influence on economic growth, inflation expectations, the strength of the US dollar and broader risk sentiment, said Yousef Alshammari, president of the London College of Energy Economics.
"Markets and many economists price in more easing ... potentially starting as early as March or June, driven by labour market softness and political pressures, which could weaken the dollar [and be a] modest upside for Brent and WTI," he said.
