Oil prices moved up on the very first trading day of 2026, bouncing back after taking their biggest yearly hit since 2020 just last year. The rise comes as Ukraine stepped up drone attacks on Russian oil sites and new U.S. sanctions tightened pressure on Venezuela’s oil exports.
Early Friday, Brent crude climbed to about $61 a barrel, while U.S. oil edged up to around $57.50, according to market data.
Tensions between Russia and Ukraine remain high. Both sides accused each other of attacking civilians on New Year’s Day, even as talks led by U.S. President Donald Trump continue in hopes of ending the nearly four-year-long war. Ukraine has recently focused more on Russia’s energy infrastructure, trying to cut off funding for Moscow’s military efforts.
At the same time, the United States is turning up the heat on Venezuela. Washington announced new sanctions targeting four companies and several oil tankers tied to Venezuela’s oil sector. The move is meant to block sanctioned tankers from entering or leaving the country, making it harder for Venezuela to ship oil.
These restrictions are forcing Venezuela’s state-owned energy company to get creative. With tankers blocked and fuel piling up, the company is using unusual workarounds just to keep its refineries running.
Even with today’s price bump, oil had a brutal year in 2025. Both Brent and U.S. crude fell nearly 20%, marking their worst annual drop since 2020. For Brent, it was the third year in a row of losses, the longest losing streak on record. Oversupply fears and tariff worries outweighed geopolitical tensions for most of the year.
In the U.S., oil production continues to surge. Output hit a record 13.87 million barrels per day in October, according to government data.
Recent reports also show a mixed picture on inventories. Crude oil stockpiles fell, but gasoline and diesel supplies rose, as refineries ramped up activity.
So while oil prices are starting 2026 on a stronger note, the market is still caught between geopolitical risks, high supply, and global demand concerns—a balancing act traders will be watching closely in the months ahead.
