On January 2, the first trading session of 2026, oil prices slightly increased in early Asian trading as geopolitical tensions continued to offer support following the major benchmarks worst annual losses since 2020.
As of this writing, U.S. West Texas Intermediate had increased 0.30% to $57.59 per barrel, while Brent crude had increased 0.30% to $61.03 per barrel.
The gains come after a difficult 2025 in which both indices experienced their worst yearly performance since the pandemic-driven collapse in 2020, falling by about 20%.
After Russia and Ukraine traded accusations of attacks on infrastructure and civilians around the New Year, prices saw early support.
Zelenskyy said on Telegram that Russia had fired over 200 drones aimed at power infrastructure in seven different locations, while Russian officials recorded drone attacks on industrial and energy installations in a number of Russian regions.
Tightening U.S. sanctions against Venezuela's oil industry added to the rising pressure. Four businesses and related oil ships were sanctioned by Washington this week for allegedly participating in Venezuela's prohibited oil trade.
Exports are further restricted by the sanctions, which essentially prevent sanctioned ships from entering or departing Venezuelan ports.
As storage space fills up, the national oil giant PDVSA is already being forced by the limits to close wells in the Orinoco Belt that produce extra-heavy crude.
Near-term geopolitical risks seem to be the only really bullish variables that may offset the larger structural constraints that dominated oil markets during 2025, given the abundance of global production and the uncertainty surrounding demand growth.
