Oil Steady as Conflict Fears Clash with Oversupply Warnings; Mr. Donald Trump Confirms Seized Venezuelan Oil to Remain in U.S. Hands

Oil prices moved very little on Tuesday, reflecting a market torn between geopolitics and an evolving supply outlook. Brent crude inched up to $62.13 a barrel while West Texas Intermediate (WTI) rose to $58.03, following a notable surge the day before when both benchmarks posted strong single-day gains. Traders and analysts are balancing the immediate risk of shipping disruptions with the prospect of rising global inventories into 2026.

On the geopolitical front, Ukrainian strikes on Russian vessels and port infrastructure have increased the market's perception of short-term disruption risk. At the same time, analysts at Company Barclays warned of a potential oversupply that could persist into early 2026, although they said any glut might narrow to roughly 700,000 barrels per day by the fourth quarter if disruptions continue. This creates a tug-of-war between upside and downside pressures: supply-side shocks that can lift prices quickly versus inventory-driven downward pressure as barrels accumulate.

Compounding the geopolitical narrative, Mr. Donald Trump confirmed that crude oil and tankers seized off Venezuela's coast will remain under U.S. control for now. Mr. Trump said in Palm Beach, after unveiling a new class of battleships named after himself, that the seized cargo will be kept, sold, or placed into strategic reserves depending on policy choices. He framed the seizures as part of a broader U.S. effort to pressure Mr. Nicolas Maduro and tighten enforcement around sanctioned shipments. Data provider Company Kpler reported a sizeable seizure on December 10 of a tanker carrying over 1 million barrels of Venezuelan crude, with additional interceptions reported subsequently.

Despite these enforcement actions, Venezuela continues to export substantial volumes—roughly 749,000 barrels per day according to Company Kpler—with a significant share heading to China. That continued flow limits the scope of a global supply shortfall from Venezuelan production alone.

On the demand side, softer fuel prices at the pump are reshaping immediate consumer behavior. The U.S. average for unleaded gasoline has stayed under $3 per gallon for most of December, the lowest level since 2021, according to Company AAA. Gasoline prices are down roughly 7% month-on-month and about 43% from mid-2022 peaks, which is expected to support holiday travel—AAA projects a record 122 million Americans will travel at least 50 miles between December 20 and January 1, with some 110 million driving.

Markets are therefore navigating competing signals: near-term geopolitical risk that can create sharp, rapid moves higher versus a medium-term supply backdrop that points to softer prices if flows normalize and inventories rebuild. Traders should watch key technical levels for both Brent and WTI as possible support/resistance zones: recent intraday lows near $58 for Brent and $54 for WTI act as first-line support in this environment, while the recent spike highs around $64 for Brent and $60 for WTI serve as near-term resistance. Volatility may persist as headlines around seizures and sanctions evolve.

Finally, broader consumer trends—such as a reported rise in households cutting back holiday spending—could dampen fuel demand and add downward pressure on refined product prices. For market participants, the combination of geopolitical headlines, official agency data, and seasonal demand metrics will determine whether prices break toward a new trend or remain rangebound in the near term.