Crude dropped after US President Donald Trump revived efforts to take control of Greenland, unsettling global investors and deepening concerns about geopolitical risk. Brent crude slid toward 64 dollars a barrel, while West Texas Intermediate fell below 60 dollars.

The market reaction was less about Greenland itself and more about what it signals.

Bloomber reported that Trump’s push to seize the Arctic territory has shaken confidence in the US-European alliance, a key anchor of global political stability.

When alliances look uncertain, investors tend to reduce risk. That has weighed on stocks, currencies and commodities, including oil.

This political shock landed at a time when oil prices were already under pressure from weak fundamentals. Global supply is expected to grow faster than demand this year.

The International Energy Agency(IEA) has warned that the market could face a significant surplus, a view that has capped any sustained rebound in prices.

Speaking at the World Economic Forum in Davos, IEA Executive Director Fatih Birol said oil and gas prices could remain under downward pressure for several years. He pointed to rising output from the United States and other producers, which is adding more barrels to a market struggling to absorb them. In simple terms, too much oil is chasing too little demand.

Venezuela has added another layer of uncertainty. Traders are watching where its crude exports will go after recent US intervention disrupted established trade routes. Much of Venezuela’s oil had been flowing to China. Any redirection could reshape regional supply balances and intensify competition in Asia.

Trade tensions are also back in focus. Ahead of Trump’s scheduled speech at Davos, the US administration threatened to impose 10 percent tariffs on eight European countries over the Greenland dispute. Such measures risk slowing economic growth, particularly in Europe, which would further weaken energy demand at a time when consumption is already fragile.

Still, the market is not uniformly weak. Short-term supply conditions remain tight in some regions. The price gap between near-dated oil contracts remains in backwardation, a structure that signals strong immediate demand for physical barrels. Production disruptions at a major Kazakh oil field, along with constraints at the Caspian Pipeline Consortium export route in the Black Sea, have limited available supply in the spot market.