Crude oil prices fell Thursday after the Biden Administration decided to ease sanctions against Venezuela's oil and gas sector, which could shore up global supply.
Brent crude futures dropped 1.3% to $90.3 a barrel as of 3:40 pm GST, while the US West Texas Intermediate (WTI) crude declined 1.1% to $87.4 per barrel around the same time.
The US issued a six-month license enabling transactions involving Venezuela’s oil and gas sector—including exports and investments. The license will be renewed after six months if Venezuela, an OPEC member, meets its commitments, including the unrestricted participation of opposition leaders in next year’s elections and the release of “wrongfully detained” Americans and political prisoners.
The deal is not anticipated to boost Venezuela's oil output quickly instead, it could expand profits by returning some foreign companies to its oilfields and providing its crude to more customers, Reuters reported, citing experts.
Oil prices jumped almost 2% Wednesday after a blast at a Gaza hospital aggravated tensions in the Middle East region, fuelling worries over potential supply disruptions, and after the US, the world's biggest oil consumer, reported a larger-than-expected inventory draw, adding to already tight supplies.
Iran's foreign minister, Hossein Amir-Abdollahian, called on members of the Organization of Islamic Cooperation (OIC) to impose an oil embargo and other sanctions on Israel, four sources from the group told Reuters. But OPEC said it was not planning to take any immediate action.
"Although OPEC shows no indication of taking up Iran’s call to impose an oil boycott on Israel, oil will almost certainly become a feature of the conflict in several ways," RBC Capital Markets analyst Helima Croft told Reuters.
The ongoing Israel-Palestine conflict poses a limited risk of oil supply disruptions, according to the International Energy Agency (IEA), but the agency emphasized preparedness to take action if the situation escalates and necessitates intervention.
