WTI oil prices have gone up due to worries about supply caused by geopolitical tensions. On Friday, prices nearly hit $57.70 during European trading hours. Tensions between Russia and Ukraine have intensified, with both sides accusing each other of attacks, heightening supply fears. Additionally, the US Treasury has imposed sanctions on four oil tankers that were helping Venezuela evade restrictions.

Impact Of Sanctions On Oil Tankers

These sanctions have limited tanker access to Venezuela, creating logistical challenges for the state oil company PDVSA. Last week, US crude oil stockpiles dropped by 1.934 million barrels, which is a bigger decrease than expected. Traders are closely watching the upcoming OPEC+ meeting, where they anticipate that production increases will remain on hold. WTI oil, known for being “light” and “sweet,” is a key benchmark in the oil market. Factors that affect WTI oil prices include global economic growth, political instability, and OPEC’s decisions about production. The value of the US Dollar also plays a role, as oil is mainly traded in US Dollars.

Global Oil Market Factors

Oil inventory data from the API and EIA affect prices by showing levels of demand and supply. OPEC’s quotas significantly influence oil prices since their decisions guide supply adjustments. With WTI crude oil prices exceeding $57.50, we can expect continued price fluctuations in the coming weeks. The main drivers are geopolitical supply threats, which often lead to sudden and unpredictable price changes. This isn’t a time to be complacent, as events in Eastern Europe and South America are currently impacting the market. The rising conflict between Russia and Ukraine is a major concern, especially following attacks on New Year’s Day. In the last quarter of 2025, there was a documented 15% increase in attacks on Russian energy facilities, and this trend appears to be continuing. These developments endanger crude processing and export capabilities, creating a risk for rising prices. We should also consider the effects of new US sanctions on tankers supporting Venezuela. Late 2025 estimates indicated this shadow fleet was transporting nearly 400,000 barrels per day. Cracking down on this fleet removes a significant supply source from the market, tightening global oil balance at a time when other risks are elevated. Data from last week supports the idea of higher oil prices. The unexpected drop of 1.934 million barrels in US crude stockpiles indicates strong demand as we enter the new year. By the end of 2025, total US commercial inventories were about 3% lower than the five-year average, showing a market with limited supply options. Now, attention turns to the virtual OPEC+ meeting this Sunday. The consensus is that the group will keep its current production levels, aligning with its strategy from the latter half of 2025 to maintain a price floor. This decision removes a potential factor that could lower prices and reinforces the supply discipline seen from OPEC. Given these current conditions, implied volatility in WTI options is likely to increase, making long positions in futures or call options appealing despite the higher cost. Traders may consider bull call spreads to benefit from a potential rise toward $60 while managing the premium paid. Short-selling seems particularly risky until there are clear signs of easing geopolitical tensions. Create your live VT Markets account and start trading now.

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