Oil prices were little changed after a volatile Tuesday session as traders balanced fading expectations for a Russia–Ukraine peace agreement against rising geopolitical tensions in the Middle East, particularly around Yemen. Brent crude for February delivery edged slightly lower to $61.92 per barrel, while U.S. West Texas Intermediate settled at $57.95.
The market consolidated after strong gains the prior session, when both benchmarks rose more than 2% following Saudi airstrikes in Yemen and renewed tensions between Moscow and Kyiv. Russia’s accusation that Ukraine targeted a presidential residence has further complicated diplomatic efforts, reinforcing skepticism that a near-term peace agreement will materialize. While the direct impact on Russian crude flows remains limited, prolonged negotiations continue to add a modest geopolitical risk premium to prices.
Additional support came from ongoing disruptions elsewhere, including continued restrictions on Venezuelan oil exports and temporary suspension of Caspian CPC Blend shipments due to adverse weather conditions. Together, these factors have helped cushion prices despite broader bearish fundamentals.
Attention also remained on the Middle East as Saudi Arabia carried out strikes in southern Yemen and warned that its national security interests remain a red line. The escalation underscored persistent instability in the region, even as the UAE signaled a reduction in its remaining military presence in the country.
Despite renewed geopolitical concerns, analysts cautioned that the broader market remains structurally oversupplied. Expectations of rising global production relative to demand continue to limit upside potential, with prices forecast to trend lower into early 2026 as surplus conditions intensify.