Global oil prices rebounded on Wednesday, rising above the 60-dollar-per-barrel mark, following a fresh escalation in United States action against Venezuela’s oil sector, despite lingering bearish pressures from geopolitical and economic developments.

Market data showed that oil prices gained more than two per cent after U.S. President Donald Trump ordered what he described as a “total and complete blockade” of all sanctioned tankers entering and leaving Venezuela, a move that heightened fears of supply disruptions from the South American oil producer.

As of midday trading on Wednesday, U.S. West Texas Intermediate (WTI) crude rose by 2.44 per cent to trade at 56.62 dollars per barrel, while Brent crude climbed by 2.27 per cent to 60.26 dollars per barrel, according to figures from Oilprice.com.

President Trump, in a post on his Truth Social platform, described the Venezuelan government as a “foreign terrorist organisation,” justifying the blockade as part of efforts to curb alleged illicit activities linked to the administration of President Nicolás Maduro, including drug trafficking and human smuggling.

He further claimed that what he termed the “largest armada ever assembled in the history of South America” would continue to expand until Venezuela returns oil, land and assets he alleged belong to the United States.

Analysts noted that although the blockade targets only sanctioned vessels operating within Venezuela’s long-standing “shadow fleet,” the action could still disrupt a significant share of the country’s estimated 850,000 barrels per day crude exports, most of which are shipped to China.

However, Chevron’s licensed operations, which involve shipping Venezuelan crude oil to the United States, are expected to remain unaffected in the near term.

The rebound in prices followed a sharp decline earlier in the week, when crude prices slipped below 60 dollars per barrel on Tuesday, reaching their lowest levels since May. The earlier drop was driven by optimism surrounding possible Russia-Ukraine peace talks and weak economic data from China, which dampened market sentiment.

Reuters reported that Brent crude futures fell by 1.03 dollars, or about 1.7 per cent, to 59.53 dollars per barrel on Tuesday, while WTI crude declined by 1.06 dollars, or 1.9 per cent, to 55.76 dollars per barrel.

According to the report, the United States had offered NATO-style security guarantees for Kyiv, while European negotiators indicated that progress had been recorded in talks, raising hopes that an end to the Russia-Ukraine war could be approaching. Russia, however, maintained that it was unwilling to make territorial concessions, according to its state news agency, TASS.

Market indicators also reflected continued bearish sentiment, as the six-month Brent futures spread moved into contango for the first time since October. Analysts at Barclays projected that Brent crude would average 65 dollars per barrel in 2026, slightly above current forward curves, citing an already priced-in surplus of about 1.9 million barrels per day.

Additional pressure came from China, where new economic data showed factory output growth slowing to a 15-month low, while retail sales recorded their weakest growth since December 2022. An analyst at IG Markets, Tony Sycamore, was quoted by Reuters as saying that the data reinforced concerns about the ability of global demand to absorb recent increases in oil supply.

Although fears of oversupply were partly offset by the recent U.S. seizure of a sanctioned Venezuelan tanker, traders observed that ample floating storage and a surge in Chinese purchases of Venezuelan crude ahead of potential sanctions limited the immediate impact on prices.

Despite Wednesday’s rebound, analysts cautioned that broader bearish sentiment remains dominant in the oil market and that, without further concrete policy actions beyond the latest U.S. rhetoric, a sustained rally in oil prices may prove difficult to achieve.