Geopolitical Risk Premium Returns: Oil Stabilizes as US Military Moves on Venezuela

Crude oil markets have found a floor, with WTI climbing back above $58.50, as geopolitical friction in the Western Hemisphere and Eastern Europe revitalizes the risk premium. While demand-side concerns driven by rising US inventories linger, supply-side threats are taking center stage.

Caribbean Escalation

Reports confirm the deployment of US Osprey aircraft and special operations forces to the Caribbean, signaling a potential escalation in Washington's pressure campaign against the Maduro government in Venezuela. The US has already begun intercepting tankers, choking off Venezuelan crude exports. This effective blockade threatens to remove a chunk of heavy crude supply from the market, acting as a bullish counterweight to lackluster global consumption data.

Black Sea Logistics Under Fire

Simultaneously, the war in Ukraine has intensified targeting of commodity infrastructure. Russian missile and drone strikes on the Port of Odessa have damaged storage facilities and a civilian cargo vessel, threatening to sever a critical artery for global grain and fuel transit. While peace talks in Miami have produced draft papers on security guarantees, the Kremlin's dismissal of the talks as “no breakthrough” suggests the conflict—and its disruption to Black Sea logistics—will persist into 2026.