Crude Oil Prices Soar on Halted Supply at Kazakh Field

By Adedapo Adesanya

Crude oil prices closed higher on Wednesday on optimism around tighter supply after a temporary shutdown at two large fields in Kazakhstan, with Brent futures gaining 32 cents or 0.5 per cent to finish at $65.24 a barrel, and the US West Texas Intermediate (WTI) futures rising by 26 cents or 0.4 per cent to $60.62 a barrel.

Kazakhstan, a member of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) halted output at the Tengiz and Korolev oilfields due to power distribution issues.

The market initially treated the Kazakhstan outage as a bullish catalyst, as Tengiz is one of the world’s largest oil fields, but it soon became clear that the interruption would be temporary, limiting its ability to underpin prices for long.

Reuters reported that output at the two fields could remain shut for another seven to 10 days, according to industry sources. The shutdown follows fires that damaged power infrastructure serving the Chevron-operated Tengiz site and the adjacent Korolev field.

Elsewhere in the country, oil from the vast Kashagan field has been diverted to the domestic market for the first time due to bottlenecks at the Black Sea CPC terminal, after equipment at the terminal was seriously damaged in drone attacks.

Prices also gathered support as low volume of Venezuelan oil exports highlighted slow progress in reversing output cuts in the South American country.

The volume of Venezuelan oil exported under a flagship $2 billion supply deal with the U.S. reached about 7.8 million barrels on Wednesday.

The world’s oil demand growth is set to rise by 930,000 barrels per day in 2026, thanks to lower oil prices and a normalization of economies after the 2025 tariff chaos, the International Energy Agency (IEA) said on Wednesday, raising its demand growth estimate by 70,000 barrels per day from last month.

Oil demand is forecast to grow by an average 930,000 barrels per day this year, accelerating from 850,000 barrels per day in 2025, the agency said in its closely-watched Oil Market Report for January.

In the December report, the IEA had expected global oil demand growth at 860,000 barrels per day for 2026.

Global oil supply is now projected to rise by 2.5 million barrels per day this year to 108.7 million barrels per day, following a jump of 3 million barrels per day in 2025, according to the IEA.

Meanwhile, the American Petroleum Institute (API) estimated that crude oil inventories in the United States saw a build of 3.04 million barrels in the week ending January 16. Official data from the US Energy Information Administration (EIA) will be released later on Thursday, a day later due to Monday’s federal holiday in the US.