By: Economy Middle east

Oil prices edged lower on Friday and were on track to post a second consecutive weekly decline, as growing optimism over a potential Russia–Ukraine peace agreement outweighed worries about supply disruptions caused by a blockade of Venezuelan oil tankers.

As of 6:04 GMT, Brent crude slipped 19 cents, or 0.32 percent, to $59.63 a barrel, while U.S. West Texas Intermediate fell 19 cents, or 0.34 percent, to $55.81 a barrel. So far this week, Brent has lost 2.3 percent, and WTI fell 2.5 percent.

Peace settlement to support the oversupply theme

Oil prices fell further after U.S. President Donald Trump said on Thursday that negotiations aimed at ending the war in Ukraine were “getting close to something,” ahead of a planned U.S. meeting with Russian officials this weekend.

“Market expectations for a peace settlement between Russia and Ukraine further pressured oil, as markets expect loosening of sanctions and a potential rise in Russian exports, which further support the oversupply theme,” said Vijay Valecha, chief investment officer, Century Financial.

Regarding Venezuela, uncertainty remains over how Washington would implement Trump’s announcement to block sanctioned tankers entering and leaving Venezuela, which accounts for about 1 percent of global oil supply. The announcement came after the U.S. Coast Guard seized a Venezuelan oil tanker last week in an unprecedented move.

“U.S. President Trump’s announcement of a ‘total and complete blockade’ on all sanctioned oil tankers entering or leaving Venezuela is a notable escalation due to its breadth and its immediacy,” said Tony Sycamore, analyst at IG.

Global oil supply to exceed demand through 2026

Oil prices have also come under pressure as expectations grow that global oil supply will continue to exceed demand through 2026, with higher output from non-OPEC producers and muted consumption growth in major economies keeping inventories ample.

“Global inventories have shown a four-year high, with an average build of 1.2 million barrels per day for the rest of 2025, which further exacerbates the fundamental gap between supply and demand,” added Valecha.

OPEC and its allies have gradually raised production this year as they rolled back earlier voluntary cuts, adding sizeable volumes to an already well-supplied global market. Concerns have also been intensified by weak demand in China, where slower growth in industrial activity and consumer spending has curbed gains in fuel consumption.

Meanwhile, recent data showing comfortable crude and fuel stockpiles in the United States and parts of Asia have reinforced the view that the market remains well buffered against potential disruptions.