Venezuela Resumes Oil Exports Following Lifting of US Embargo, Price Rise Pauses
Venezuela resumed oil exports following the lifting of US sanctions, while deadly internal unrest in Iran pushes prices higher. Prices fell on Wednesday after a four-day rally fueled by Venezuela's resumption of exports and rising US crude oil and commodity inventories.
Brent futures traded down 20 cents, or 0.3%, at $65.27 a barrel at 05:25 GMT. WTI crude oil traded down 23 cents, or 0.4%, at $60.92 a barrel.
Oil prices have priced in a significant geopolitical risk premium over the past few days amid escalating unrest in Iran and drone strikes in the Black Sea.
Unless we see further escalation and a real disruption to oil flow, the market may consolidate at these levels and await the next moves in a complex global order.
Large US crude oil and petroleum product inventories, reported late Tuesday by the American Petroleum Institute (API), could also put pressure on prices. According to API, US crude oil inventories rose 5.23 million barrels in the week ending January 9. Gasoline inventories increased by 8.23 million barrels from the previous week, while distillate inventories rose by 4.34 million barrels.
The US Energy Information Administration's inventory data will be released on Wednesday. Surveys had predicted a decrease in US crude oil inventories last week, while gasoline and distillate inventories were expected to increase.
Venezuela's resumption of shipments is affecting prices. On Monday, two supertankers, each carrying approximately 1.8 million barrels of crude oil, left Venezuelan waters. This could be the first shipments under a 50-million-barrel supply agreement reached to revive exports after the US ousted Venezuelan President Nicolas Maduro.
The escalating protests in Iran have heightened fears of supply cuts from OPEC’s fourth-largest producer. This is a key factor pushing prices higher. Trump urged Iranians to continue their protests on Tuesday, saying help was on the way, but you can guess what that means.
The protests in Iran, risking tightening price balances through short-term supply losses, have raised the outlook for Brent crude expectation to $70 a barrel for the next three months.
The current risks are more geared towards political and logistical friction rather than direct disruptions, which is keeping the impact on Iranian crude oil supply and export flows limited.
According to analysts, the protests have not yet spread to Iran’s main oil-producing regions, limiting the impact on actual supply.
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