Global oil prices climbed sharply again on Monday, as rising geopolitical tensions in the Middle East and fresh U.S. enforcement actions against Venezuela-linked crude flows injected a new risk premium into the market.
As of 9:00 p.m. WAT, Brent crude traded at $68.99 per barrel, up $0.94 or 1.38 per cent, while West Texas Intermediate (WTI) rose to $64.31, gaining $0.76 or 1.20 per cent.
The renewed upside follows a series of security developments affecting key oil-producing regions and major maritime routes.
U.S. Boards Venezuela-Linked Tanker
In a dramatic escalation, U.S. military forces boarded the crude oil tanker Aquila II in the Indian Ocean after tracking it from the Caribbean.
U.S. Defense Secretary Pete Hegseth confirmed that forces conducted a “right-of-visit, maritime interdiction and boarding” without incident. Washington accused the vessel of breaching sanctions tied to Venezuela.
Shipping data indicates the Suezmax tanker departed Venezuelan waters in early January carrying approximately 700,000 barrels of heavy crude, reportedly bound for China. The cargo formed part of a broader flotilla linked to Venezuela’s state oil company, PDVSA. Several vessels in that group have either returned to Venezuela or been seized.
The move underscores Washington’s intensified enforcement posture following last month’s raid in Caracas and signals tighter monitoring of sanctioned oil flows across international waters.
Strait of Hormuz Advisory Fuels Supply Concerns
Oil markets also reacted to a U.S. advisory urging American-flagged vessels to avoid Iranian territorial waters while transiting the Strait of Hormuz and the Gulf of Oman.
The U.S. Department of Transportation warned of boarding risks near Iranian territory, noting recent incidents. It advised ships to remain close to Oman when heading eastbound through Hormuz.
The advisory revived fears of potential supply disruptions in one of the world’s most strategic oil chokepoints. Roughly 20% of global oil consumption passes through the Strait of Hormuz, making any security tension immediately market-sensitive.
Although Washington and Tehran recently held indirect talks described as constructive, Iranian officials have warned of retaliation if U.S. forces escalate military pressure in the region. As a result, traders appear to be pricing in geopolitical risk rather than near-term fundamentals.
Hedge Funds Boost Bullish Oil Bets
Financial positioning confirms the shift toward a risk-driven rally.
Money managers increased net-long Brent crude positions by more than 31,000 contracts in the week ending February 3, lifting total long positions to nearly 278,000 lots, the highest level in about ten months. Net-long WTI positions also climbed to a six-month high.
The data suggests funds are adding fresh long exposure while trimming short positions, signaling renewed conviction in higher prices.
Market analysts note that Brent contracts tend to react more strongly to Middle East supply risks than U.S. benchmarks, explaining the stronger positioning in the global crude market.
Russia Sanctions and India’s Buying Shift
Beyond Iran and Venezuela, markets are tracking Western efforts to restrict Russia’s oil revenue.
The European Commission has proposed a ban on services supporting Russia’s seaborne crude exports. Meanwhile, refiners in India — previously major buyers of Russian barrels — are reportedly reducing purchases for April delivery.
Analysts say a sustained pullback from Indian buyers would provide further bullish support to global crude prices.
Market Focus: Risk Premium Over Fundamentals
While Kazakhstan’s Chevron-led Tengiz field has recovered to about 60% of peak output and aims for full production by February 23, traders appear more focused on geopolitical developments than incremental supply gains.
Energy market observers suggest that near-term price direction may hinge less on inventories and demand data, and more on how U.S.-Iran tensions evolve and how aggressively sanctions enforcement continues.
For now, renewed enforcement actions, maritime advisories, and hedge fund positioning have combined to push Brent and WTI higher — marking another session where geopolitics, rather than fundamentals, drives crude markets.