IEA says markets may adjust to US sanctions on Venezuela


Energy market participants may be able to adjust to U.S. sanctions against Venezuela‘s crude industry, the IEA said in its closely-watched report on Tuesday.

The report comes at a time when tensions in Venezuela are reaching boiling point, with the oil-rich, but cash-poor, country in the midst of the Western Hemisphere’s worst humanitarian crisis in recent memory.

President Donald Trump‘s administration imposed targeted crude sanctions on Caracas late last month. The surprise move was designed to bar President Nicolas Maduro‘s access to oil revenue that has helped his embattled administration remain in power.

“The imposition of sanctions by the United States against Venezuela’s state oil company Petroleos de Venezuela (PDVSA) is another reminder of the huge importance for oil of political events,” the Paris-based IEA said Tuesday.

“Even so, headline benchmark crude oil prices have hardly changed on news of the sanctions. This is because, in terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations,” the group added.

International benchmark Brent crude traded at around $62.90 Tuesday morning, up 0.8 percent, while U.S. West Texas Intermediate (WTI) stood at $53.46, more than 0.6 percent higher.

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