Oil prices climbed on Thursday after two days of declines as market participants shifted their attention to developments involving Venezuela and proposed U.S. sanctions legislation, offering support to crude benchmarks despite ongoing concerns about global oversupply. By mid-morning trading in London, Brent crude futures were up about 1 per cent at roughly US$60.55 per barrel, while U.S. West Texas Intermediate (WTI) rose around 1 per cent to about US$56.57.

The recovery followed a broader reevaluation of geopolitical risk tied to Venezuela’s oil sector and progress on U.S. legislative efforts to tighten sanctions against entities linked to Russia. The U.S. Senate recently advanced a sanctions bill that could reach a vote soon, heightening market fears that further restrictions on Russian crude exports might tighten global supply. That dynamic — combined with ongoing uncertainty over Venezuelan oil flows — helped underpin prices after recent declines.

In recent sessions, oil benchmarks had slid partly because traders were pricing in an abundant global supply outlook for 2026, with forecasts suggesting a significant surplus in the first half of the year. Analysts at major financial institutions have projected the market could run several million barrels per day over supply, a factor that has kept a lid on prices even as headline risks emerge.

Also Read: Top Canadian tech AI stocks

Beyond sanctions talk, attention has also centered on U.S. moves involving Venezuelan crude assets. Earlier announcements highlighted a deal worth up to US$2 billion for access to Venezuelan barrels, which may involve rerouting cargoes originally bound for Asia. Such developments introduce uncertainty about future supply patterns, as shifts in traditional export destinations could feed back into pricing dynamics.

Inventory data also played a part: a recent report from the U.S. Energy Information Administration showed a larger-than-expected drawdown in crude stocks, reinforcing views that near-term supply may be tighter than anticipated even amid broader surplus concerns.

Also Read: Best long term Canadian stocks

Despite the uptick, market sentiment remains cautious and nuanced. Underlying fundamentals still point to a well-supplied market overall, and any geopolitical premium in crude pricing could prove temporary unless disruptions to supply become sustained. For now, traders are balancing geopolitical headlines with the structural oversupply narrative as they enter 2026.