Crude prices were largely unchanged on Tuesday, with traders weighing the potential fallout from Ukrainian drone attacks on Russian energy facilities and rising diplomatic strain between the United States and Venezuela.
By 0903 GMT, Brent crude slipped 19 cents (0.3%) to $62.98 a barrel, while U.S. West Texas Intermediate eased 12 cents (0.2%) to $20 a barrel.
Both benchmarks gained more than 1% on Monday, with WTI hovering close to a two-week high.
Ole Hansen, head of commodity strategy at Saxo Bank, noted that although front-month prices remain relatively rangebound, geopolitical risks are once again adding a premium, particularly around the Black Sea and Venezuela.
He added: “Besides that, the expected yet elusive supply glut remains a key focus preventing any meaningful bounce at this point.”
The supply outlook grew more complicated on Monday after the Caspian Pipeline Consortium confirmed it had restarted shipments from one of its Black Sea loading points following the major Ukrainian drone strike on November 29.
Tensions increased further after U.S. President Donald Trump announced on Saturday that “the airspace above and surrounding Venezuela” should be viewed as closed, injecting new uncertainty into the market given Venezuela’s role as a notable oil producer.
Analysts are also watching the diplomatic track closely.
Tamas Varga of PVM Oil Associates said: “Focus is also on the Ukrainian peace talks, which might result in Russia increasing its crude oil and product exports once again, although this process is likely to be protracted.”
Ukrainian President Volodymyr Zelenskiy reiterated on Monday that Kyiv remains focused on protecting sovereignty and securing firm security guarantees, noting that territorial questions continue to represent the most difficult hurdle in negotiations.
Meanwhile, Trump’s special envoy Steve Witkoff, accompanied by Jared Kushner, is set to meet Russian President Vladimir Putin on Tuesday to discuss possible pathways toward ending the conflict.
In the background, OPEC+ confirmed on Sunday that it will move ahead with a small production increase in December but will pause further hikes in the first quarter of next year amid concerns over a potential global supply surplus.