Oil Prices Rise After Steepest Annual Loss Since 2020

Oil prices edged higher in the first trading session of 2026, rebounding after posting their largest annual losses since 2020, as geopolitical risks resurfaced with Ukrainian drone attacks on Russian oil facilities and renewed pressure from US sanctions on Venezuelan exports.

By 04:09 GMT on Friday, Brent crude futures rose 35 cents to $61.20 per barrel, while West Texas Intermediate gained 34 cents to $57.76 per barrel.

The rebound comes against the backdrop of escalating tensions between Russia and Ukraine, which exchanged accusations of attacks on civilians on the first day of the new year. The developments occurred despite intensified diplomatic efforts led by US President Donald Trump aimed at ending the nearly four-year-old war.

In recent months, Kyiv has stepped up strikes on Russia’s energy infrastructure, targeting oil and fuel facilities in an effort to disrupt Moscow’s revenue streams that fund its military campaign in Ukraine. These attacks have raised concerns about potential supply disruptions, lending support to oil prices after a prolonged period of weakness.

Meanwhile, Washington increased pressure on Venezuela by imposing new sanctions on Wednesday against four companies and associated oil tankers linked to the Venezuelan oil sector. The measures are part of a broader strategy to tighten the economic squeeze on President Nicolás Maduro.

The US sanctions are designed to prevent blacklisted tankers from entering or leaving Venezuela, forcing the state-owned energy company to rely on unconventional solutions to avoid shutting down refining units as unsold fuel inventories accumulate.

Despite Friday’s modest gains, both global oil benchmarks recorded annual losses of around 20 percent in 2025, marking their sharpest declines since 2020. Market sentiment throughout the year was weighed down by concerns over rising global supply and the impact of tariffs, which largely offset geopolitical risk premiums. For Brent crude, 2025 marked the third consecutive year of losses, the longest losing streak on record.