Rising Oil Prices Amid Potential US Sanctions on Venezuela: Implications for Investors and Businesses in Oman
Oil Prices Rise Amid US Sanctions and Venezuelan Supply Concerns
LONDON: Oil prices increased on Thursday as investors assessed the possibility of further US sanctions against Russia and potential supply disruptions resulting from a threatened blockade of Venezuelan oil tankers.
By 0910 GMT, Brent crude had risen by 32 cents, or 0.54%, reaching $60 per barrel, while US West Texas Intermediate crude gained 38 cents, or 0.68%, settling at $56.32 per barrel.
The anticipated US sanctions and President Donald Trump’s announcement regarding a blockade of sanctioned tankers carrying Venezuelan oil contributed to the rise in prices, according to analysts.
On Wednesday, Bloomberg reported that the US is readying another set of sanctions aimed at Russia’s energy sector, contingent on Moscow’s willingness to agree to a peace deal with Ukraine. A White House official later informed Reuters that Trump had not finalized any decisions regarding these new sanctions.
Analysts from ING indicated that additional restrictions on Russian oil could pose a greater supply risk to markets compared to the proposed blockade of Venezuelan exports. The blockade could impact up to 600,000 barrels per day of Venezuelan oil exports, predominantly destined for China, although around 160,000 barrels per day shipped to the US are expected to continue under existing authorizations. Chevron vessels are still departing for the US under a previous government waiver.
Despite most Venezuelan exports being on hold, the state oil company PDVSA has resumed loading crude and fuel cargoes following a cyberattack that temporarily disrupted operations, according to sources and customs data.
The specific enforcement measures for a US blockade remain uncertain. Last week, the US Coast Guard made an unprecedented move by seizing a Venezuelan oil tanker, and preparations for further interdictions are reportedly underway.
Venezuelan crude constitutes approximately 1% of the global oil supply.
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The recent rise in oil prices due to impending US sanctions on Russia and potential disruptions from Venezuelan supply highlights risks and opportunities for Omani businesses. Companies should brace for increased operational costs while also capitalizing on the chance to enhance their market share amid tightening global oil supplies. Smart investors should consider diversifying investments in oil-related sectors and monitor geopolitical developments closely to navigate potential volatility.
