Oil prices fell on Tuesday as markets weighed expectations of ample global supply in 2026 against uncertainty surrounding Venezuelan crude output following the U.S. capture of President Nicolas Maduro. Brent crude settled down $1.06, or 1.7%, at $60.70 a barrel, while U.S. West Texas Intermediate fell $1.19, or 2.0%, to $57.13.
Analysts said supply conditions remain the dominant driver. Global oil demand likely grew by about 900,000 barrels per day last year, below the historical trend of 1.2 million bpd, while supply growth remained strong. OPEC output rose by roughly 1.6 million bpd and non-OPEC supply increased about 2.4 million bpd between the fourth quarters of 2024 and 2025, leaving the market well supplied entering 2026. Morgan Stanley estimates the oil market could face a surplus of up to 3 million bpd in the first half of the year.
Market participants said it was too early to assess how Maduro’s capture could affect oil balances. While the event raised speculation about a potential easing of U.S. restrictions on Venezuelan oil, analysts cautioned that any supply response would likely be gradual. Venezuelan production averaged about 1.1 million bpd last year, and years of underinvestment and sanctions have limited the country’s ability to ramp output quickly despite holding the world’s largest oil reserves.
U.S. President Donald Trump said American oil companies were prepared to invest in Venezuela, and oil executives are expected to meet with White House officials this week to discuss potential involvement. Still, analysts at Rystad Energy estimate only about 300,000 bpd of additional Venezuelan supply could be brought online over the next two to three years without significant international capital, with much larger increases requiring sustained investment over the long term.
Broader market sentiment remains cautious, with traders expecting prices to stay under pressure as surplus conditions become clearer. U.S. crude and product inventories were also expected to have risen last week, according to a Reuters poll, with official government stockpile data due on Wednesday.