Oil prices climbed on Monday (December 1) as the escalation in the US-Venezuela tensions reached a fever pitch, offsetting weeks of losses driven by oversupply expectations.
The market’s shift also came after the Caspian Pipeline Consortium (CPC)—a key transit route that carries about 1 percent of global oil—halted operations over the weekend. The company reported that a mooring point at its Russian Black Sea terminal had been damaged in a Ukrainian drone attack, which temporarily curbed exports.
Ukraine has also targeted two oil tankers heading toward Novorossiysk, further rattling market sentiment.
The supply shock landed just as OPEC+ opted to leave production levels unchanged for the first quarter of 2026. The group had signaled the possibility of a pause as early as November, seeking to avoid exacerbating what analysts feared could become a sizeable glut.
The decision provided a modest anchor for traders recalibrating expectations for early-2026 supply.
“For some time, the narrative has centred on an oil glut, so OPEC+’s decision to maintain its production target provided some relief and helped stabilise expectations for supply growth in the coming months,” LSEG senior analyst Anh Pham told Reuters.
Even with Monday’s rise, both Brent and WTI futures settled lower last Friday. This marked their fourth straight monthly decline and the longest losing streak since 2023.
Venezuela condemns US “colonialist threat”
A far more dramatic source of volatility also emerged from Washington over the weekend. On Saturday, US President Donald Trump declared that “the airspace above and surrounding Venezuela” should be considered closed.
“To all Airlines, Pilots, Drug Dealers, and Human Traffickers, please consider THE AIRSPACE ABOVE AND SURROUNDING VENEZUELA TO BE CLOSED IN ITS ENTIRETY,” the Chief Executive warned on Truth Social.
Trump also told service members last week that US forces would “very soon” begin land-based operations targeting Venezuelan drug-trafficking networks.
Further, reports surfaced that the White House and Caracas held a tense, last-ditch phone call aimed at defusing a worsening standoff.
According to sources cited by the Miami Herald, Washington told President Nicolás Maduro he could secure safe passage for himself, his wife Cilia Flores, and his son only if he stepped down immediately.
The conversation stalled as Venezuela refused to surrender control of the armed forces or accept an immediate resignation.
Washington itself has been increasingly aggressive toward what it describes as Venezuela’s Cartel de los Soles, which US officials accuse Maduro and senior leaders of operating.
Last month, the State Department’s decision to designate the cartel as a Foreign Terrorist Organization placed Maduro, Diosdado Cabello, and Vladimir Padrino López in the same legal category as al-Qaeda and ISIS.
Caracas condemned the aggression, labeling it as a “colonialist threat” seeking support from its allies. On Sunday, Maduro issued an appeal to fellow OPEC members, urging the bloc to help counter what he described as “growing and illegal threats” from the United States.
In a letter published by state broadcaster TeleSUR, he accused Washington of trying to “seize” Venezuela’s oil reserves and warned that US military pressure could disrupt the global energy market.
“I hope to count on your best efforts to help stop this aggression, which is growing stronger and seriously threatens the balance of the international energy market, both for producing and consuming countries,” Maduro wrote.
Venezuela exported just US$4.05 billion in crude oil in 2023, far below other major producers, due largely to US sanctions imposed during Trump’s first term.
Brent crude stood at US$62.76 a barrel on Tuesday morning (December 2), while US West Texas Intermediate (WTI) traded at US$58.93.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.