Oil prices climb as the West considers fresh sanctions
2024-04-18
Summary:
Oil prices rose Thursday on supply concerns. The US plans to reinstate oil sanctions on Venezuela; the EU discusses new sanctions on Iran.
Oil prices rose in early trade on Thursday as supply jitters reemerged. The US said it would reinstate oil sanctions on Venezuela while the EU talked of fresh curbs on Iran.
According to a US senior administration official, they “completed a very careful review” and determined that the Maduro government “has fallen short” in several key areas of the agreement.
The US Treasury Department issued a temporary authorization to allow transactions with the South American country’s energy sector last year. The sanctions will come back in force into 45 days.
Elsewhere EU foreign policy chief Josep Borrell said some member states had asked for sanctions against Iran to be expanded after a barrage of missiles and drones struck Israel at the weekend.
Oil markets are set to become “extremely tight” in the second half of this year as OPEC+ has regained grip on global supply, according to Citadel, citing ‘discipline’ shown by US producers.
Some analysts have noted the cartel will ease their production restrictions if prices rise above $100 a barrel, in order to avoid further erosion of their market share.
Brent crude remains above the ascending line despite a major pullback this week. As such a rally towards the $90 resistance is more likely than not.
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