Oil prices rose more than 1 per cent on Monday following drone attacks by Ukraine, the closure of Venezuelan airspace by the United States, and a decision by the Organisation of the Petroleum Exporting Countries and allies (OPEC+) to leave output levels unchanged in the first quarter of 2026.
Brent crude futures settled at $63.17 a barrel after going up by 79 cents or 1.27 per cent and the US West Texas Intermediate (WTI) crude futures traded at $59.32 a barrel after growing by 77 cents or 1.32 per cent.
Ukrainian naval drones have been attacking sanctioned tankers in the Black Sea in recent weeks as the country piled on the pressure on Russia’s vast oil industry. Last week, two oil tankers sailing to Novorossiysk, a major Russian Black Sea oil terminal, were hit, with Ukraine taking credit. On Monday, a tanker carrying Russian gasoil was hit by multiple explosions off the coast of Senegal, marking the third case in recent days.
Ukraine has repeatedly urged the West to take action against Russia’s shadow fleet, which is helping move Russian oil around global markets and fund its war. Last month, the Trump administration announced fresh sanctions targeting Russia’s oil and gas giants, Rosneft and Lukoil. It has also drafted a new 19-point peace plan that’s far more favorable to Ukraine compared to the original 28-point plan that heavily favored Russia.
This development comes as global oil demand continues to rise despite the negativity, further lending support despite worries to supply.
OPEC+ reaffirmed its plan to maintain current production levels rather than raise output further on Sunday. The move had been expected and is seen as an attempt to guard against a supply glut.
The decision comes amid growing concerns that the global oil market remains oversupplied, with multiple market participants and analysts expecting a glut in 2026. The group is still holding some 3.24 million barrels per day of production offline, with 1.24 million barrels per day of that being the voluntary cuts that the group has been unwinding this year.
However, market analysts noted that prices remain far below earlier 2025 levels, as a global surplus looms driven by rising production from both OPEC+ and non-OPEC producers, as well as weak demand growth.
Concerns about a possible conflict between the US and Venezuela also remains a key factor as American military has concentrated a quarter of its global naval fleet off Venezuela in a major escalation aimed at pressuring Nicolás Maduro to step down.
On Saturday, the US President said “the airspace above and surrounding Venezuela” should be considered closed, sparking fresh uncertainty in the oil market, as the South American nation is a major producer. While a full-scale US invasion appears unlikely due to limited troop levels and high risks, targeted military action may still be employed, potentially destabilizing the wider region.