Oil prices edged higher in the first trading session of 2026, attempting to stabilise after suffering their steepest annual decline since 2020 amid persistent concerns over global oversupply and weak demand. However, fresh geopolitical tensions have offered short-term support, helping prices recover slightly from last year’s sharp losses.
Brent crude futures rose to around $61 a barrel, while U.S. West Texas Intermediate traded close to $58, reflecting cautious optimism among investors at the start of the year. Nevertheless, markets remain sensitive as traders weigh immediate supply disruptions against longer-term fundamentals pointing towards excess production.
Read more : Oil prices ease amid Venezuela, Russia concerns
Geopolitical risks added pressure on supply after Ukrainian drone attacks targeted Russian oil infrastructure, intensifying efforts to disrupt Moscow’s energy revenues amid the ongoing conflict. At the same time, renewed U.S. sanctions and shipping restrictions on Venezuela have tightened export routes, forcing operational challenges for its state-run energy sector.
Despite these risks, oil prices ended 2025 nearly 20% lower, marking the third consecutive annual decline for Brent crude, the longest losing streak on record. Oversupply fears, rising production outside OPEC+, and uncertainty around global trade policies outweighed conflict-driven price support throughout the year.
Read more : Oil prices edge higher as oversupply worries ease –
Looking ahead, investor focus has shifted to the upcoming OPEC+ meeting, where producers are widely expected to maintain current output levels in early 2026. Analysts believe sustained U.S. record production and steady Chinese stockpiling may keep prices range-bound, limiting any sharp rebound in the near term.