Oil markets are shrugging off war and sanctions, a sign that oversupply now matters more than disruption

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Oil producers hoping geopolitics would lift prices are running into a harsh reality. Markets are brushing off wars and sanctions as traders focus instead on expectations of a deep and persistent oil glut.

That shift was evident last week. Despite several geopolitical developments that would once have pushed prices higher, including the U.S. seizure of a Venezuelan crude tanker and fresh Ukrainian strikes on Russian energy infrastructure, oil markets barely reacted, with prices ending the week lower.

Brent crude settled Friday at US$61.12 a barrel and U.S. West Texas Intermediate at US$57.44, capping a weekly drop of more than four per cent.

Instead of responding to disruption headlines, markets were reacting to a different risk. Bearish sentiment, rather than geopolitics, continued to dominate as expectations of a “2026 glut” took centre stage.

Geopolitical shocks piled up last week, yet prices barely blinked.
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