Oil Prices Rise on Geopolitical Risks, China Imports Grow
Oil prices surged for the second consecutive day, gaining more than 0.80% on Tuesday after hitting its lowest levels since June last week.
The upward move is largely driven by a mix of geopolitical risks in light of both U.S.–Venezuela tensions and OPEC+ supply dynamics, Samer Hasn, Senior Market Analyst at XS.com said in a commentary note.
At the same time, expectations of a more accommodative Federal Reserve are adding to the support, keeping sentiment constructive after weeks of pressure on crude.
Geopolitical tensions are once again playing a critical role. According to the Pentagon, two Venezuelan military aircraft flew dangerously close to a U.S. Navy vessel operating in international waters.
This incident occurred just days after President Trump ordered a strike in the region that killed suspected narcoterrorists, marking an escalation in Washington’s naval deployment aimed at stopping drug flows and increasing pressure on Nicolás Maduro’s regime.
Trump is reportedly considering a wider range of military options, including potential strikes inside Venezuela itself, as part of a broader effort to weaken Maduro.
Meanwhile, The Guardian noted that the dispatch of three U.S. warships earlier this month sparked fears of an imminent invasion, though most experts viewed the move as symbolic, designed to intimidate Maduro’s circle and rally Republican support at home rather than trigger a large-scale intervention.
Nevertheless, the persistent risk of miscalculation means markets are now factoring in a substantial premium for geopolitical risk, primarily because the country in question is home to the world’s largest oil reserves.
On the supply side too, crude futures snapped a three-session losing streak yesterday in what traders described as a “sell the rumor, buy the fact” reaction to OPEC+’s announcement that it will continue unwinding voluntary output cuts in October, adding 137,000 barrels a day, per analyst comments reported in The Wall Street Journal.
The decision had been leaked ahead of time, so the immediate reaction was muted, but analysts highlighted that when factoring in compensation cuts for members that previously exceeded quotas, the net increase is likely to be modest, according to The Journal.
This reinforces the view that OPEC+ remains cautious and flexible, a factor that is helping to stabilize prices rather than push them into deeper declines.
On the geopolitical front, Trump’s strategy on Venezuela’s oil sector also continues to shape the broader energy landscape.
The escalation between the two countries is not new. A review of the timeline of major events suggests that recent US actions may be concealing a hidden economic agenda.
Earlier this year, Trump revoked Chevron’s license to operate in the country, forcing a wind-down of production and fueling a rally in oil prices. He later escalated by imposing a 25% tariff on goods from countries purchasing Venezuelan crude, a move widely interpreted as targeting China.
These steps reflect Trump’s intent to choke off Maduro’s revenue streams while simultaneously reshaping global oil flows to America’s advantage.
At the macro level, monetary policy expectations are also providing a supportive backdrop for commodities. The CME FedWatch Tool shows an 88% probability of a 25-basis-point cut in September, and an 11% probability of a 50-basis-point move, which emerged as a new development this week. By year end, markets are now pricing in around a 70% chance of cumulative 75 basis points in cuts, compared with less than 50% just last week. These expectations followed weaker-than-expected U.S. labor market data, which increased bets on easier financial conditions, indirectly supporting oil demand outlooks.
Yet, downside risks remain. Chinese trade data showed exports rising only 4.4% year-on-year in August, down from 7.2% in July and below Wall Street Journal expectations of 5.2%. The trade balance also missed forecasts, raising concerns about external demand and the resilience of global trade. For oil markets, weaker Chinese trade performance underscores a fragile demand side, limiting the scope for a sustained rally despite geopolitical and monetary policy support.
CHINA IMPORTS RISE
China’s crude oil imports increased by 4.8% in August compared to the previous month, reaching approximately 49.5 million tons, according to preliminary data from the General Administration of Customs. On an annual basis, the imports showed a modest rise of 0.8%.
For the January-August period, total imports reached about 376 million tons, up 2.5% from the same period last year. The increase follows refinery maintenance, usually between March and May, as refineries continue running at high rates.
As the world’s largest crude oil importer, changes in China’s oil demand significantly impact global oil markets. The country has more than 80 refineries, most of which are operated by state-owned firms, with a combined annual crude processing capacity of around 956 million tons as of the end of 2024.
Qatar Deals
Qatari Energy Minister Saad bin Sherida Al-Kaabi held talks in Doha on Monday with his Syrian counterpart, Mohammed Al-Bashir, to discuss cooperation between the two countries in the oil and gas sectors.
The ministers explored ways to exchange technical and engineering expertise, and benefit from successful experiences in developing energy infrastructure projects, the Syrian Arab News Agency (SANA) reported.
The talks also addressed prospects for joint investment in future projects and ways to support efforts to develop Syria’s energy sector, the outlet said.
The two ministers stressed the importance of continued consultation and coordination to boost opportunities for practical cooperation and keep pace with developments in various energy fields.
Relations between Qatar and Syria’s new administration have seen notable progress since President Ahmed al-Sharaa assumed leadership of the country in late 2024.
On Dec. 21, 2024, just days after the fall of the Bashar al-Assad regime, Qatar reopened its embassy in Damascus following a nearly 13-year closure.
On April 15, 2025, Sharaa visited Doha and met with Qatar’s Emir Sheikh Tamim bin Hamad Al Thani.
Since Assad’s ouster in late 2024, Syria’s new administration has been implementing economic and political reforms while intensifying efforts to launch and expand cooperation with numerous countries.
