Oil Rises as 2026 Begins With OPEC+ and Geopolitics in Focus

Oil prices edged up on the first trading day of 2026, recovering some losses after posting their steepest annual decline since 2020. Brent crude traded above $61 a barrel, while West Texas Intermediate hovered near $58, as traders reassessed fundamentals following the New Year break.

Attention is firmly on OPEC+, with the producer group set to hold a virtual meeting on Jan. 4. Members led by Saudi Arabia and Russia are widely expected to maintain their pause on further supply increases, reinforcing a cautious stance after last year’s price slump driven by ample global output.

Geopolitical developments added a layer of support. The U.S. intensified pressure on Venezuela by sanctioning companies and vessels accused of helping the country bypass oil export restrictions, targeting entities in Hong Kong and mainland China. At the same time, renewed strikes between Russia and Ukraine damaged Black Sea port infrastructure, including a refinery, keeping regional supply risks on investors’ radar.

Iran also emerged as a focal point after its currency hit a record low and protests spread in several cities. President Masoud Pezeshkian attempted to calm tensions by promising to revise proposed tax hikes, acknowledging public grievances while navigating mounting economic pressure.

Despite these flashpoints, the broader outlook remains weighed down by supply concerns. Crude prices fell roughly 20% last year amid fears of a global glut following earlier OPEC+ hikes and rising production from non-OPEC producers. The International Energy Agency has forecast an oversupply of around 3.8 million barrels per day in 2026.

Analysts note that while geopolitical risks may provide short-term price support, structural factors could dominate in coming months. Expectations of continued oversupply and the possibility of progress toward a peace deal in Ukraine suggest oil prices may remain under pressure through the first quarter of the year.