Oil was down on Tuesday as the market weighed expectations of ample global supply this year against uncertainty around Venezuelan crude output after the US capture of President Nicolas Maduro.
Brent crude futures declined by 69 cents or 1.1 per cent to $61.07 a barrel and the US West Texas Intermediate (WTI) crude tumbled by 79 cents or 1.4 per cent to $57.53 a barrel.
Oil supply will be sufficient in 2026, with or without an increase in production from Venezuela, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
US President Donald Trump wants the big American oil firms to return to Venezuela and invest in rebuilding the oil infrastructure in the country holding the world’s biggest proven oil reserves, estimated at about 303 billion barrels.
Venezuela, a founding member of OPEC, has more oil reserves than each of its fellow OPEC members and top exporters in the Gulf, including Saudi Arabia, Iraq, the United Arab Emirates (UAE), and Iran.
With Maduro out, US oil giants are set to invest billions of US Dollars to fix the oil infrastructure and start making money for Venezuela, according to President Trump.
Venezuela’s oil sector has long been in decline, due in part to underinvestment and US sanctions. Oil production from the country averaged 1.1 million barrels per day last year. Exxon, ConocoPhilips, and Chevron are some of the names that could make return to the South American country.
Morgan Stanley analysts said in a note on Tuesday that global oil demand likely grew by around 900,000 barrels per day last year, compared to a historical trend rate of 1.2 million barrels per day.
OPEC supply grew 1.6 million barrels per day and non-OPEC supply grew about 2.4 million barrels per day between the fourth quarters of 2024 and 2025, the Morgan Stanley analysts said.
The bank said oil markets could be in a surplus of as much as 3 million barrels per day in the first half of 2026.
Saudi Arabia has cut the price of its flagship crude grade Arab Light loading for Asia in February, in the third consecutive monthly reduction amid ample supply and weakened Middle Eastern benchmarks.
Saudi Arabia’s decision to cut the prices of all its crude grades follows this weekend’s short OPEC+ meeting, at which the eight producers implementing the cuts reaffirmed they would keep oil production steady through the first quarter of 2026.