Despite frequent geopolitical issues, WTI crude oil has performed tepidly in 2025. The Russia-Ukraine conflict that began in 2022 continued into 2025, but its supportive effect on the crude oil market has become very weak. The Israel-Palestine conflict that started in 2023 also persisted into 2025, yet its impact has significantly diminished. In 2025, intense conflict erupted between Israel and Iran, only concluding after the United States intervened to strike Iran, marking a period of extremely high tension. However, WTI crude oil did not experience a sharp rally during this time.
In June, when the Iran-Israel conflict began and ended, WTI crude oil reached a high of $78.4, which was a decent performance. Nevertheless, the final closing price was only $64.97, representing a significant pullback and remaining close to the opening price of $61.11.
At the beginning of 2026, another major news story broke in the United States. Venezuelan President Maduro was taken away by U.S. forces in the capital, Caracas, and faced judicial trial in New York on Monday. This highly dramatic event was shocking. Venezuela holds the world's largest proven oil reserves, and the abduction of its president logically suggested that its oil exports would suffer a severe blow.
However, WTI crude oil's reaction to this event has been muted. This past Monday, WTI rose from an opening price of $57.47 to a high of $58.51, seemingly buoyed by the Maduro incident. On Tuesday, the WTI price retreated rapidly from its highs, and the decline continued into Wednesday. During today's session, WTI hit a low of $55.76, breaking below the $56 mark and setting a new weekly low.
Why did the impact of the Maduro event dissipate so quickly? The answer lies in a lack of uncertainty.
Major funds trading contracts require strong expectations as a basis. The higher the uncertainty of these expectations, the greater the potential volatility of future price movements, and consequently, the larger the scale of major capital that can be attracted. The problem with the Maduro event is that the U.S. action was too swift, achieving its strategic objective within hours, leaving the market no time to react. Furthermore, Venezuela has shown no signs of intending military action. The situation essentially concluded almost as soon as it began. Under such circumstances, which lack uncertainty, major funds naturally have no incentive to trade crude oil contracts on a large scale.
In terms of price action, WTI has been in a downtrend since hitting a high of $130 in 2022. Over the past two years, while the decline has continued, its pace has slowed significantly. For the recent price action, the $54.86 to $55.9 range could potentially serve as a significant support zone. This is because $54.86 was a notable low formed in October 2025, and $55.9 was a notable low formed in December 2025; their proximity in absolute value allows them to be viewed as a potential double-bottom structure.
On Wednesday, WTI closed with a long bearish candlestick, and during today's session, the oil price fell sharply again, with the lowest point already entering the $54.86 to $55.9 range. If a clear rebound occurs in the coming days, the double-bottom structure would be confirmed. Conversely, the downtrend in WTI is likely to continue under pressure from high inventory levels.
Comments