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What is the story about?
Crude oil prices have rebounded after falling to their lowest levels since February 2021 amidst supply concerns and renewed geopolitical tensions.
Prices gained for the fifth straight day on Tuesday, with Brent topping $62 a barrel, and WTI, after slipping below the mark of $55 recently, reclaiming the $58 a barrel mark.
Crude oil prices had skidded to early-2021 lows last week as expectations of a peace agreement between Russia and Ukraine raised hopes of bringing Russian oil back into supply chains. However, oil prices bounced back as geopolitical tensions, such as the US action on Venezuelan oil tankers and Ukraine’s strike on Russia, resurfaced.
In the Caribbean, the US has intensified efforts to block crude oil supply from Venezuela, which supplies less than 1% of global oil. The US seized two Venezuelan oil tankers in the Caribbean Sea and threatened to intercept more sanctioned vessels from entering or leaving Venezuela in a bid to disrupt supplies and stop revenue for the Maduro government.
The US naval action has reportedly affected several sanctioned tankers linked to Russia, tempering with export expectations and supporting a rebound in oil.
When asked about the same, US President Donald Trump said the US would either keep, or sell the seized oil, and would even keep the seized ships.
Ukraine’s drone strike on Russia’s Volna terminal in the Krasnodar region disrupted a main energy supply hub near the Crimean Bridge. The Volna terminal is located near the Crimean Bridge, a crucial passage for Russian military supplies and energy exports.
Ukraine also targeted Russia’s "shadow fleet" tankers, which are reportedly being used to bypass Western price caps. The Ukrainian action has derailed expectations for a peace agreement and threatened to curtail supply through shadow-fleet tankers.
The strikes come amidst the Ukrainian and US delegations engaged in peace talks, where Ukraine is seeking guarantees from the US and its allies on the steps that would be taken in case Russia attacks again after the peace deal is signed.
Another factor contributing to the price moves, is the thinning of trading volumes owing to the Christmas holidays.
Commodity Trading Advisors, who also generally contribute to the price moves, are seen covering some of their shorts.
Until Monday, Commodity Trading Advisors were 100% short on both Brent and WTI, a figure that has now declined to 91%.
Despite the small rebound, WTI Crude is down 19% so far in 2025, bracing itself for the worst annual performance since 2020.
Prices gained for the fifth straight day on Tuesday, with Brent topping $62 a barrel, and WTI, after slipping below the mark of $55 recently, reclaiming the $58 a barrel mark.
Crude oil prices had skidded to early-2021 lows last week as expectations of a peace agreement between Russia and Ukraine raised hopes of bringing Russian oil back into supply chains. However, oil prices bounced back as geopolitical tensions, such as the US action on Venezuelan oil tankers and Ukraine’s strike on Russia, resurfaced.
US-Venezuela Tensions
In the Caribbean, the US has intensified efforts to block crude oil supply from Venezuela, which supplies less than 1% of global oil. The US seized two Venezuelan oil tankers in the Caribbean Sea and threatened to intercept more sanctioned vessels from entering or leaving Venezuela in a bid to disrupt supplies and stop revenue for the Maduro government.
The US naval action has reportedly affected several sanctioned tankers linked to Russia, tempering with export expectations and supporting a rebound in oil.
When asked about the same, US President Donald Trump said the US would either keep, or sell the seized oil, and would even keep the seized ships.
Ukraine Strikes On Russian Oil Infra
Ukraine’s drone strike on Russia’s Volna terminal in the Krasnodar region disrupted a main energy supply hub near the Crimean Bridge. The Volna terminal is located near the Crimean Bridge, a crucial passage for Russian military supplies and energy exports.
Ukraine also targeted Russia’s "shadow fleet" tankers, which are reportedly being used to bypass Western price caps. The Ukrainian action has derailed expectations for a peace agreement and threatened to curtail supply through shadow-fleet tankers.
The strikes come amidst the Ukrainian and US delegations engaged in peace talks, where Ukraine is seeking guarantees from the US and its allies on the steps that would be taken in case Russia attacks again after the peace deal is signed.
Lower Volumes, Short-Covering
Another factor contributing to the price moves, is the thinning of trading volumes owing to the Christmas holidays.
Commodity Trading Advisors, who also generally contribute to the price moves, are seen covering some of their shorts.
Until Monday, Commodity Trading Advisors were 100% short on both Brent and WTI, a figure that has now declined to 91%.
Despite the small rebound, WTI Crude is down 19% so far in 2025, bracing itself for the worst annual performance since 2020.
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