Oil markets are firing on all cylinders this week, with Brent crude punching through the $70 per barrel mark for the first time since July 2025—a milestone that signals a dramatic shift in sentiment after months of bearish supply narratives.
According to OilPrice.com, Brent crude for March delivery surged 3.63% to trade at $70.92 per barrel on Wednesday, while the corresponding WTI contract gained 3.72% to $65.49. The catalyst? Reports that U.S. President Donald Trump is weighing targeted strikes on Iranian military positions as he pursues regime change. The geopolitical risk premium has jolted traders back to attention after a prolonged period of oversupply concerns that had kept prices anchored around $60 per barrel through much of 2025.
"The bearish oil glut narrative fades as Brent breaks $70," according to analysis from Standard Chartered cited by OilPrice.com. The move reflects a fundamental reassessment of supply-demand dynamics, particularly as geopolitical risks suddenly loom larger in traders' calculations.
Venezuela Opens Its Doors—And Oil Markets Take Notice
Behind the scenes, a seismic shift is underway in one of the world's largest oil-producing nations. Reuters reported on January 29 that Venezuela has approved sweeping oil reforms expected to grant operators greater autonomy in the sector. The timing couldn't be more significant: the U.S. Treasury has simultaneously issued what the Financial Times describes as a "general licence" allowing American groups to purchase and resell Venezuelan oil.
This represents a dramatic policy reversal. According to the Financial Times, the Treasury move will "open Venezuela's vast crude reserves to Big Oil" after years of sanctions that had effectively locked American companies out of the country's petroleum sector. The reforms and licensing changes could unlock billions of barrels of crude that have been stranded by underinvestment and international isolation.
For global oil markets, the implications are substantial. Venezuela's crude reserves are among the world's largest, and any meaningful increase in production could reshape supply dynamics across the Atlantic. However, the actual impact will depend on how quickly foreign operators can mobilize capital and expertise to revive aging infrastructure.
Trump's Tariff Threats Add Another Layer of Uncertainty
While geopolitical tensions with Iran are driving immediate price moves, Trump's trade agenda is creating a different kind of market uncertainty. According to MarketWatch, Trump has ordered tariffs against countries selling oil to Cuba and threatened a 50% tariff on Canadian aircraft. The Cuba angle is particularly notable given the island nation's precarious energy situation.
The Financial Times reported on January 29 that Cuba has "15 to 20 days of oil left" as crude exports to Havana are drying up amid the U.S. blockade of Venezuela and pressure on Mexico. This humanitarian energy crisis underscores how interconnected global oil markets have become—and how quickly policy decisions can create supply shocks in unexpected places.
China's Crude Appetite Keeps Prices Afloat
One often-overlooked factor supporting oil prices is China's strategic stockpiling. According to OilPrice.com, China played a significant role in supporting oil prices throughout 2025 by accelerating crude purchases and absorbing additional supply from producers. Despite OPEC+ easing production cuts and large supply growth from the Americas, international crude benchmarks held steady at about $60 per barrel—a price point that China apparently considers attractive for building reserves.
This demand from the world's largest crude importer has provided a crucial floor under prices even as supply pressures mounted. As geopolitical risks now push prices higher, China's willingness to continue purchasing at elevated levels will be a key variable to watch.
What's Next?
The energy market is at an inflection point. Geopolitical risks are pushing prices higher, Venezuela's reforms could unlock new supply, and policy uncertainty from Washington is creating additional volatility. Traders are no longer fixated on oversupply—they're now pricing in the possibility of supply disruptions and the time it takes to bring Venezuelan crude back online.
For energy investors and consumers alike, the next few weeks will be critical in determining whether this rally has legs or represents a temporary spike driven by headlines.
Reporting based on coverage from Reuters, Financial Times, OilPrice.com, MarketWatch, and Natural Gas Intel.