Oil futures showed signs of recovery on Tuesday following a slight decline in the previous session. The downward trend was triggered by ongoing discussions regarding potential concessions on U.S. sanctions related to crude exports from Venezuela.
- West Texas Intermediate crude for November delivery rose by 33 cents, or 0.4%, to $86.99 a barrel on the New York Mercantile Exchange.
- December Brent crude, the global benchmark, saw an increase of 44 cents, or 0.5%, reaching $90.09 a barrel on ICE Futures Europe.
Crude oil experienced a surge last week due to concerns that the Israel-Hamas conflict might escalate, potentially involving Iran. Such an escalation could prompt the U.S. to enforce stricter sanctions, ultimately reducing exports and further tightening global supplies.
On Monday, oil prices pulled back as investors remained vigilant about diplomatic efforts aimed at containing the conflict. Moreover, the possibility of increased supply from Venezuela added additional pressure on crude.
- West Texas Intermediate crude – New York Mercantile Exchange
- December Brent crude – ICE Futures Europe
The Biden Administration and Maduro’s Government Agree on Deal to Ease Sanctions on Venezuela’s Oil Industry
The Biden administration and the government of Venezuelan President Nicolás Maduro have reached an agreement that will result in the easing of sanctions on Venezuela’s oil industry, according to a report by the Washington Post. This deal, expected to be signed in Barbados, stipulates that Venezuela will hold a competitive and internationally monitored presidential election next year in return for the sanctions relief.
The State Department has expressed its approval of the announcement made by Maduro representatives and others to resume Venezuelan-led talks in Barbados. This move represents a step towards promoting dialogue and finding resolutions.
The potential agreement to alleviate sanctions has garnered attention from experts in the oil market. Ricardo Evangelista, a senior analyst at ActivTrades, believes that such a deal would provide relief to oil traders who have been concerned about supply-side issues.
Checkout: Venezuela is set for a ‘long journey’ to boost oil output if U.S. eases sanctions
Additionally, global leaders have engaged in diplomatic efforts to prevent further escalation in the Middle East conflict. As a result, investor confidence has been temporarily restored, as noted by Raffi Boyadjian, lead investment analyst at XM.
President Biden’s Visit to Israel
President Biden is scheduled to visit Israel on Wednesday, demonstrating the significance of diplomatic efforts to manage the conflict and avert a humanitarian crisis in Gaza. This visit comes following Secretary of State Antony Blinken’s recent second visit in as many days, which further emphasizes the urgency of the situation.
Read: Potential Escalation of Israel-Hamas Conflict Poses Threat to Oil Industry