Oil prices edged lower on the first trading day of 2026, extending last year’s steep losses as investors continued to weigh persistent oversupply concerns against ongoing geopolitical risks. Brent crude settled down 10 cents at $60.75 a barrel, while U.S. West Texas Intermediate eased by the same amount to $57.32.
Markets opened the year cautiously after both benchmarks posted their largest annual declines since 2020 in 2025. While geopolitical tensions remained elevated, price action suggested traders remain focused on fundamentals and the view that global supply will remain ample. Russia and Ukraine traded accusations of attacks on civilians on New Year’s Day, even as talks overseen by U.S. President Donald Trump aimed at ending the nearly four-year war continued. Ukraine has stepped up strikes on Russian energy infrastructure in recent weeks, seeking to pressure Moscow’s war financing.
Attention also remained on Venezuela after the Trump administration imposed new sanctions on four companies and related tankers tied to the country’s oil sector. Venezuelan President Nicolas Maduro said his government was open to renewed dialogue with Washington, including potential U.S. investment in the oil industry, though exports remain constrained under existing enforcement. Elsewhere, Trump warned Iran that the United States could support protesters if security forces escalate their response to ongoing unrest.
Despite those risks, analysts noted that oil prices have remained range-bound, reflecting confidence that supply disruptions would be limited. Traders also monitored rising tensions between Saudi Arabia and the United Arab Emirates related to Yemen, which led to flight suspensions at Aden’s airport, though the dispute has yet to materially affect oil flows.
Focus now turns to the upcoming OPEC+ meeting, where the group is widely expected to maintain its pause on output increases through the first quarter. Analysts say producer discipline, along with continued stockpiling by China, could help establish a near-term floor for prices. Still, the broader outlook remains defined by surplus expectations, with Brent and WTI having fallen nearly 20% in 2025, marking Brent’s third consecutive year of losses.