Global oil markets trended downward in early Monday trading, weighed down by a surplus of supply and persistent demand concerns. These economic factors are currently overshadowing significant geopolitical developments, including high-stakes friction within OPEC+ and the dramatic U.S. military intervention in Venezuela.
Despite a brief attempted rally, prices faced resistance due to robust global inventories. Brent Crude dropped 0.6 percent from Friday’s close, trading at $60.33 per barrel, while the U.S. benchmark West Texas Intermediate (WTI) fell approximately 0.7 percent to $56.82 per barrel.
Traders are currently pricing in the implications of a U.S. military operation over the weekend that resulted in the capture of Venezuelan President Nicolas Maduro and his wife.
Speaking to the press aboard Air Force One, U.S. President Donald Trump declared that Washington is effectively in charge of the South American nation to oversee a transition, though specific details on the administration remain fluid.
While Venezuela’s Supreme Court named Vice President Delcy Rodriguez as acting president, Trump emphasized U.S. dominance, stating that the administration requires total access to the country’s oil and other resources to facilitate rebuilding efforts.
Although Venezuela possesses the world’s largest oil reserves surpassing even Saudi Arabia, years of sanctions and operational mismanagement have severely curtailed its output. Consequently, analysts suggest that the immediate impact on global supply will be limited. Furthermore, reports indicate that the U.S. operation left the country’s oil production and refining infrastructure intact.
Adding to the bearish market sentiment, key members of the OPEC+ alliance resolved on Sunday to maintain their current output policy. This decision follows a volatile 2025, which saw oil prices crash by over 18 percent, marking the steepest annual decline since 2020. The eight-member coalition, comprising Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Kazakhstan, Algeria, and Oman, controls roughly half the world’s oil supply. They had previously planned to increase output by 2.9 million barrels per day but agreed in November to pause these hikes through March 2026.
The decision to hold steady comes amid significant internal strain. A decade-long conflict in Yemen has driven a wedge between Saudi Arabia and the UAE, historically close allies. The rift widened last month after a UAE-aligned faction seized territory from the Saudi-backed government.
While OPEC has historically managed to compartmentalize political disputes to focus on market stability, the current landscape is fraught with challenges. Beyond the Saudi-UAE split, the group is navigating sanctions on Russian exports due to the Ukraine war, as well as instability in Iran, where ongoing protests have drawn threats of potential U.S. intervention.