Oil prices increased by over 1% during Asian trading on Monday, with Brent Oil Futures rising 1.2% to $63.13 per barrel and West Texas Intermediate (WTI) crude jumping 1.2% to $59.27 per barrel. This price surge is attributed to OPEC+’s decision to maintain output steady through the first quarter and to renewed concerns over supply stemming from geopolitical tensions. OPEC+ plans to uphold voluntary production cuts of 3.24 million barrels per day amidst uneven demand and possible oversupply by 2026.
The organization also established a framework for assessing production capacities from January to September 2026 to set baseline quotas for 2027, which may cause disagreements among member countries regarding higher production baselines.
Traders are also reacting to potential supply risks related to U.S. policies on Venezuela as the President indicated he might close the airspace over the country, which exports approximately 800,000 barrels per day, primarily to China.
Recent attacks on Russian energy infrastructure, specifically targeting the Caspian Pipeline Consortium (CPC), have further disrupted exports after a naval drone strike damaged facilities at a key terminal. The CPC, crucial for Kazakh and Russian crude shipments, reported the suspension of loadings due to these attacks, adding to the supply concerns in the market.
