Executive Summary

Key insights and market outlook

Oil prices experienced a slight increase on the first trading day of 2026, following a significant annual decline in 2025. Brent crude rose to US$60.99 per barrel ¹

while West Texas Intermediate (WTI) reached US$57.56 per barrel ¹. The rise was driven by heightened geopolitical tensions, particularly Ukraine's drone attacks on Russian energy facilities and US pressure on Venezuela's oil exports ¹².

Full Analysis

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Deep Dive Analysis

Oil Prices Show Slight Recovery After Significant Annual Drop

Geopolitical Tensions Drive Price Increase

Oil prices demonstrated a modest recovery on the first trading day of 2026, rebounding from the largest annual decline since 2020 recorded in 2025. The Brent crude price rose by 14 cents to US$60.99 per barrel ¹

, while WTI crude increased by 14 cents to US$57.56 per barrel ¹. This price movement was primarily driven by escalating geopolitical tensions, particularly Ukraine's drone attacks on Russian energy facilities and the United States' continued pressure on Venezuela's oil exports ¹².

Market Dynamics and Price Movements

The price recovery was observed despite concerns about global oil supply and demand dynamics. By Friday, January 2, 2026, Brent crude for March delivery rose to US$61.27 per barrel ²

, while WTI crude for February delivery reached US$57.84 per barrel ². However, later in the trading session, prices stabilized with Brent crude at US$60.81 per barrel and WTI at US$57.39 per barrel ³, reflecting the ongoing balance between geopolitical risks and supply concerns.

Geopolitical Factors Influencing Oil Prices

The ongoing conflict between Russia and Ukraine continued to impact oil markets significantly. Both countries have been involved in a series of attacks on each other's infrastructure, with Ukraine increasing its strikes on Russian energy facilities in recent months ²

. Additionally, the diplomatic efforts led by US President Donald Trump aimed at ending the nearly four-year conflict added complexity to the market dynamics ²³.

Market Outlook

The oil market is expected to remain volatile as geopolitical tensions continue to influence price movements. Investors are closely monitoring the developments in the Russia-Ukraine conflict and their potential impact on global oil supply.

References