Wants the US to Control Venezuela's Oil Taps?
Oil prices edged higher as the market digested the United States' latest moves regarding Venezuela. WTI held steady at US$56/barrel after a sharp drop, while Brent remained below US$60/barrel.
This slight increase occurred as traders weighed the US's purported plan to control Venezuelan oil sales going forward. This meant more than just sanctions, but also the question of who would "regulate" the flow of Venezuelan oil to the market.
US Energy Secretary Chris Wright stated that the US government would begin by offering stored crude oil, then move on to selling Venezuelan oil supplies. The US Energy Department also stated that the oil had already begun to be marketed.
From Venezuela's perspective, state-owned oil company PDVSA claimed to be negotiating with Washington to allow oil sales through a framework similar to that of Chevron—the only major US oil company still operating in the country.
Politically, President Donald Trump is pushing US companies to help rebuild Venezuela's weakened energy industry, which has suffered years of under-maintenance and under-investment. The US government has also begun selectively easing sanctions as part of this effort.
Meanwhile, US pressure is also evident at sea: the US has seized two more sanctions-related tankers, including the Bella 1, which had evaded sanctions and attempted to protect itself under Russian flag registration before being intercepted in the Atlantic.
Key Points:
- Oil prices rose slightly, with the market remaining in a wait-and-see mode after the previous session's decline.
- The US is preparing a scheme to regulate/determine future Venezuelan oil sales.
- Initial stage: sell stored crude, then move on to the next Venezuelan oil supply.
- PDVSA admits it is negotiating a sales mechanism similar to Chevron's scheme.
- The US is increasingly aggressively pressuring through maritime routes with the seizure of sanctions-related tankers. (asd)
Source: Newsmaker
