Brent falls as US considers easing Venezuelan oil sanctions

The front-month ICE Brent contract has lost $0.92/bbl on the day, to trade at $87.31/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Brent futures remained well-supported amid growing tension between the government of Israel and Palestine-based Hamas militants.

Moreover, speculations about Iran’s involvement in the Middle Eastern conflict have also sparked fears of a tighter crude oil supply in 2024 as that could trigger the US to impose stricter sanctions on Iranian oil.

“There is still a risk that this [conflict] escalates, particularly if there is any Iranian involvement,” said analysts from ING bank. “Under this scenario, stronger enforcement of US sanctions on Iranian oil would tighten up the oil market through 2024,” they further added.

Additionally, oil market analysts expect crude oil prices to remain elevated as OPEC+ top oil producers pledged to maintain production cuts until the end of 2023.

Downward pressure:

Brent lost the previous day’s gains after Reuters reported that the US government is ready to ease sanctions on Venezuelan oil. The news eased concerns about the impending supply tightness in the global oil market.

Oil traders are now waiting for fresh cues about interest rate hike from the US Federal Reserve's meeting minutes that are scheduled to be released later today.

By Aparupa Mazumder

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