Oil moves lower as US says it will lift Venezuelan barrels

Brent crude’s price has retreated after US President Donald Trump said that Venezuela’s interim authorities will provide the US with 30-50 million bbls of sanctioned oil.

IMAGE: Flags of Venezuela and the US. Getty Images

The oil will be sold at “market price”, Trump wrote on the social media platform Truth Social yesterday.

The crude oil from Venezuela “will be taken by storage ships, and brought directly to unloading docks in the United States,” Trump said.

Oil market participants are now interpreting Venezuelan President Nicolas Maduro’s detention as a downside risk for crude amid expectations that additional Venezuelan supply could enter an already oversupplied global oil market.

Although a near-term increase in Venezuelan oil output appears unlikely, according to analysts.

However, any understanding between Washington and Caracas over these stored barrels could lower the risk of further US sanctions.

“Any rehabilitation of Venezuela’s oil sector could take years and billions of dollars in capital,” SPI Asset Management managing partner Stephen Innes said. “Still, even the prospect of future supply is sufficient to cap prices in an already oversupplied market,” he added.

By Aparupa Mazumder

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