Oil Price Forecast: Oil Near $60 Weigh Venezuela Shock Against 3.8M bpd Glut

Oil Price Outlook: BZ=F And CL=F Between War Risk And A 3.8M bpd Glut

Starting Point: Brent BZ=F At $60.75 And WTI CL=F At $57.32

Three-Year Slide: Brent BZ=F Treats $60 As A Checkpoint, Not A Floor

Front-month Brent (BZ=F) closed the first 2026 session at $60.75, down $0.10 on the day and almost 20% for 2025, locking in a third straight annual loss. That is the longest losing streak on record for the benchmark and leaves BZ=F hovering just above levels last seen almost five years ago. Brent finished 2025 at about $60.85, well below the roughly $74 year-end print of 2024, confirming a sustained downtrend rather than a one-off shock. At this point, the $60 zone is not a structural floor; it is a test level where every fresh shock is weighed against a market that is already priced for oversupply.

WTI CL=F Mirrors The Damage With A $57.32 Close And Weak U.S. Balance

WTI (CL=F) settled at $57.32, also down about $0.10 on the day and roughly 20% lower for 2025, echoing Brent’s performance. U.S. crude is dragged by the same theme: inventories that refuse to tighten and domestic production that remains high. Weekly data from the U.S. petroleum reports have repeatedly shown crude and product stockpiles grinding higher into year-end, reinforcing the idea that CL=F is capped in the mid-$50s to low-$60s unless either demand accelerates or supply is cut more aggressively.

Global Oversupply: IEA’s 3.8M bpd Surplus Caps Any Durable Rally

The structural overhang is clear in the projections. For 2026, the global balance is modeled with supply exceeding demand by about 3.8 million barrels per day, even after OPEC+ delayed planned production increases until after the first quarter. Major banks now anchor their base cases around Brent in the $50s, with some explicitly flagging $55 as a realistic level by spring if growth data remains soft, particularly from China. Under that backdrop, every geopolitical flare-up has to fight a 3.8M bpd wall to maintain any risk premium in BZ=F or CL=F.

Benchmark Versus Physical: Murban, OPEC Basket, Mars And Product Prices

The pricing of other key grades and products confirms that weakness is broad but not uniform. Murban crude trades near $61.19, the OPEC basket around $61.22, Louisiana Light approximately $59.24, Bonny Light close to $78.62, and Mars US near $70.06. Gasoline futures sit around $1.698 per gallon and U.S. natural gas near $3.618. Heavy sour grades such as Mars and certain OPEC blends still secure a premium to BZ=F, reflecting their importance for diesel and industrial fuels, but the overall message is simple: the complex remains cheap by recent standards, and even quality premia cannot erase the headline weakness.

Venezuela Shock: Maduro’s Capture Hits Headlines Harder Than Barrels

The overnight seizure of Nicolás Maduro and his wife in Caracas by U.S. forces is a geopolitical earthquake but a limited volumetric shock. Venezuela holds around 303 billion barrels of proven reserves, roughly 20% of global reserves on paper, yet output sits near 1.0–1.1 million barrels per day, or about 1% of global crude supply. That is less than half of what the country produced before Maduro took control in 2013 and far below the 3.5 million bpd pumped before the broader socialist regime hollowed out the sector. Years of under-investment, sanctions, tanker seizures and mismanagement have already priced a large chunk of Venezuelan potential out of BZ=F and CL=F.

Heavy Sour Crude: Quality Risk For Refineries, Not A Global Supply Shock

The real stress point is quality. More than 67% of Venezuela’s volume is heavy, sulfur-rich crude. U.S. Gulf refineries were designed to run this feedstock efficiently, whereas the U.S. shale boom produces mostly light, sweet crude, ideal for gasoline but less optimal for diesel, jet fuel and industrial products. If Venezuelan exports fall from roughly 1.0–1.1M bpd toward the lower end of that range or below, the main impact will be on grade differentials and refinery margins, not on the aggregate 100M bpd global supply figure. Expect the stress to show up first in the price of heavy grades and in diesel and distillate cracks, while BZ=F and CL=F may only see a modest and temporary lift.

Risk Premium Mechanics: 5–7% Gaps Versus Fast Mean Reversion

Historical patterns around similar shocks matter. During prior major strikes, front-month crude has opened 5–7% higher in the first trading session before fading once it became clear that cargoes still moved and infrastructure remained mostly functional. The same playbook applies now. The base expectation is that Brent (BZ=F) and WTI (CL=F) can gap higher by several dollars on reopening, testing roughly $62–65 on BZ=F and $59–61 on CL=F if port damage and blockade headlines dominate. Without confirmation of sustained export losses, macro-driven sellers and hedgers will likely use that strength to sell into the rally, compressing the risk premium back toward the $60 / $57 anchor.

OPEC+ Strategy: Steady Output In A Market Already Drowning In Supply

A core OPEC+ panel of eight producers meets this weekend after having paused planned output increases for the first quarter. With Brent already down close to 20% in 2025 and forecasts calling for an oversupplied 2026, the group is signaling a preference to hold production steady, not to engineer another aggressive cut. The cartel faces a familiar trade-off: defend price at the cost of market share, or accept lower prices to keep volumes. For now, the bias is to protect volumes and avoid gifting more share to U.S. shale and other non-OPEC suppliers. That stance means OPEC+ will cap rallies rather than underwrite a new bull market, at least until prices break much lower and force a different conversation inside the group.

Macro And Dollar: Why CL=F Still Trades Like A High Beta Risk Asset

Short-term crude pricing is still tethered to macro data. The upcoming U.S. jobs report on January 9 will shape expectations for the dollar and interest rates. Strong job growth and firm wages support a higher dollar and a tighter policy outlook, mechanically pressuring BZ=F and CL=F because they are dollar-denominated assets. At the same time, global demand signals are uneven: industrial activity in Europe is soft, Chinese consumption is patchy, and several emerging markets are still struggling with inflation and currency volatility. In that environment, crude behaves like a cyclical risk asset with abundant supply behind it. Geopolitics can move prices for a few days; the macro backdrop and inventory data decide where they settle.

Fear Premium Compression: Why The Market Stays Calm Despite Caracas

The fear premium in crude has collapsed compared to prior decades. A recent large-scale strike on Middle Eastern nuclear infrastructure only delivered a shallow, short-lived spike. The Maduro operation fits the same pattern. Rapid information flow, diversified supply and the ability of other producers to backfill barrels all blunt the impact of even dramatic events. The only scenario that could deliver a genuinely large, sustained move would be a shutdown of flows through a major chokepoint such as the Strait of Hormuz, where roughly 20–25% of global crude exports transit. Venezuela, with around 1% of global supply and no such chokepoint, does not meet that threshold. Markets will price an initial risk premium, then aggressively test how much of it is justified by actual physical disruption.

Escalation Paths: Regional Tail Risks That Traders Cannot Ignore

The real upside tail is not Venezuela alone, but escalation. The country counts Iran as a key partner, and the raid has already triggered sharp reactions from Russia, China and regional neighbors. Troop movements on the Colombian border, potential involvement of allied actors, or any attempt to widen the confrontation to shipping networks in the Caribbean or beyond could lift the risk premium meaningfully. For now, these are tail risks, not base case, and they are being discounted against the 3.8M bpd surplus and weak demand growth. Traders will watch closely for any sign that the conflict spills over into flows from other exporters. Until that happens, the volatility is real but the structural balance still dominates.

Venezuela’s Long-Term Role: From Blockaded Supplier To Bearish Supply Option

Paradoxically, the most important oil consequence of Maduro’s removal may be bearish over the medium term. If a new government gains recognition and negotiates sanctions relief plus foreign capital, Venezuela’s output can rise from roughly 1.0–1.1M bpd toward 2.0–2.5M bpd over several years. Bringing an extra 0.5–1.5M bpd of heavy crude back into a market that the IEA already sees oversupplied by 3.8M bpd in 2026 would reinforce downward pressure on BZ=F and CL=F. For refiners, that would ease quality constraints and improve heavy crude availability; for crude investors, it would be another argument against assuming a structural bull market at current levels.