Oil prices picked up slightly at the start of the week, offering a brief moment of relief in what has been a difficult year for the global energy market.
Brent crude climbed to $61.29 per barrel on December 29, rising 1.08% from the previous day. But beneath that small gain lies a much bigger story.
Over the past month, oil prices have fallen nearly 3%, and compared to this time last year, they are down more than 17%. For many producers, traders and oil-dependent economies, that decline has been hard to ignore.
The latest price rise was driven mainly by rising geopolitical tension. Fresh unrest in the Middle East, including Saudi airstrikes in Yemen and Iran’s declaration of a “full-scale war” involving the United States, Europe and Israel, has raised fears of possible supply disruptions. Whenever conflict threatens major oil routes, markets tend to react quickly.
At the same time, there was cautious optimism on the global political front. U.S. President Donald Trump said talks with Ukrainian President Volodymyr Zelenskiy were making “a lot of progress,” with reports suggesting that about 90% of a peace framework has been agreed, even though key issues remain unresolved. Any movement toward peace could reduce uncertainty in global markets.
Adding another layer to the story, China announced plans to increase government spending in 2026, a move that could boost economic activity and raise demand for oil in the world’s largest energy consumer.
Still, despite these supportive signals, oil remains under pressure. Analysts warn that global supply could outpace demand next year, pushing prices lower. As a result, oil is on track for its steepest annual decline since 2020.
For now, the modest price rebound offers a pause as markets continue to balance conflict, diplomacy, and economic uncertainty.
