As the U.S. imposed a blockade on sanctioned Venezuelan oil tankers and threatened new sanctions if Russia rejects a proposed peace deal, escalating geopolitical risks have spurred a rebound in international oil prices from near five-year lows.

Brent crude futures rose as much as 2.4%, surpassing the $60 per barrel threshold. U.S. President Donald Trump declared that Venezuela is now "fully encircled by the largest fleet in South American history."

Sources reveal that the U.S. is also considering multiple sanction options, including targeting the "shadow fleet" of tankers transporting Russian crude and traders facilitating such transactions. These measures, currently in preparation, could be announced as early as this week if Russian President Vladimir Putin rejects the Ukraine peace agreement.

The latest move against Venezuela marks a significant escalation. Just last week, U.S. forces seized a tanker near Venezuela's coast. The government of Venezuelan President Nicolás Maduro claims the U.S. actions aim to plunder the country's resources.

Trump stated he has ordered a blockade on all sanctioned tankers entering or leaving Venezuela, further pressuring Caracas as the U.S. deploys additional military forces to the region and threatens ground strikes.

Despite the recent rebound, oil prices are still on track for an annual decline. Markets anticipate global crude supply will outpace demand this year and next, driven by OPEC+ rapidly restoring idle capacity and other producers expanding output. From the U.S. to the Middle East, weak market signals persist as investors brace for what the IEA predicts could be the "largest supply surplus since the pandemic."

Warren Patterson, Head of Commodities Strategy at ING in Singapore, noted: "Given expectations of a massive supply surplus by 2026, the crude market's reaction to supply-side risks has been relatively muted."

While Venezuela's oil production has recovered slightly since its 2020 low, it remains far below historical levels. Last month, the country exported nearly 590,000 barrels per day, compared to global daily consumption exceeding 100 million barrels. Most Venezuelan crude is shipped to China.

As an OPEC member, Venezuela's flagship Merey heavy crude—often used for asphalt production—supplies China's road construction projects. On Wednesday, Shanghai asphalt futures surged from four-year lows, posting their biggest daily gain since June.