Oil Prices Swing On Venezuela Supply Outlook, US Tanker Seizure
Brent held below $61 a barrel after closing 1.7% lower on Tuesday.
Oil swung between gains and losses on the prospect that Venezuelan crude will continue to flow, particularly to the US, while a Russian flagged tanker was seized in the north Atlantic.
Brent held below $61 a barrel after closing 1.7% lower on Tuesday. Crude had earlier dropped after President Donald Trump said Venezuela’s interim authorities agreed to give up as many as 50 million barrels of “High Quality, Sanctioned Oil” to the US. CNBC said some sanctions on Venezuela would be lifted, reinforcing the chances of uninterrupted flows.
“We’re going to let the oil flow,” Energy Secretary Chris Wright said at the Goldman Sachs Energy Conference, referring to Venezuelan output. Barrels will be sold “to US refineries and to around the world to bring better oil supplies.”
The US, meanwhile, said the Marinera tanker, previously known as Bella 1, was seized in the North Atlantic. Prior to the boarding of the ship on Wednesday, Russia said it was monitoring the situation with concern, highlighting ongoing geopolitical risks as Washington seeks to end the Kremlin’s war in Ukraine.
Oil has lost ground since the start of the new year, following its worst annual slump since 2020. In addition to deep-seated concerns about a punishing global glut following supply hikes, the market continues to digest the fallout from the ouster of Venezuelan leader Nicolás Maduro by American forces, and what that means for oil exports and the country’s energy industry.
Venezuela was once an oil-producing powerhouse, but output has slumped over the past two decades and now represents 1% of global supplies. Before Maduro’s capture, the US imposed a partial naval blockade of tankers calling at the country, prompting local storage to fill and some oil wells to be shut.
Chevron Corp. is the only American oil major operating in Venezuela under special US permission, and the company continues to load crude. All of the oil goes to refineries in the US, including Valero Energy Corp. and Marathon Petroleum Corp.
Trafigura Group and other traders will hold talks with the US about how they can return to buying Venezuelan oil as Trump is set to meet with energy executives at the White House within the next week. The president has said American companies will spend billions reviving the nation’s industry.
Prices
Brent for March settlement was little changed at $60.49 a barrel as of 9:23 a.m. in New York.
WTI for February traded at $56.71 a barrel.
