Oil stabilizes on potential US sanctions on Russia, seige of Venezuelan tankers

Oil prices were steady on Thursday, as investors weighed the possibility of additional US sanctions on Russia alongside supply risks stemming from a blockade of Venezuelan oil tankers.

Brent crude slipped by one cent to $59.67 a barrel by 11:33 GMT, while US West Texas Intermediate crude rose by five cents to $55.99 a barrel.

John Evans, an analyst at PVM, said that US intentions to impose further sanctions on Russia, along with threats to block sanctioned tankers carrying Venezuelan oil, helped support prices.

Bloomberg reported on Wednesday, citing people familiar with the matter, that the United States is preparing a new round of sanctions on Russia’s energy sector if Moscow does not agree to a peace deal with Ukraine. However, a White House official told Reuters that President Donald Trump has not made any decisions regarding sanctions on Russia.

Analysts at ING said in a note that any additional measures targeting Russian oil could pose a greater risk to market supplies than Trump’s announcement on Tuesday of a potential US blockade of sanctioned tankers entering or leaving Venezuela.

In the same context, the European Union imposed sanctions on Thursday on 41 additional vessels from Russia’s so-called “shadow fleet,” bringing the total number of sanctioned ships to around 600.

Britain also imposed sanctions on 24 individuals and entities under its Russia sanctions regime, including Russian oil companies such as Tatneft and Russneft, according to a government notice issued on Thursday.

According to ING, a blockade of Venezuela could affect about 600,000 barrels per day of Venezuelan oil exports, most of which are destined for China, while exports of around 160,000 barrels per day to the United States are likely to continue. The bank noted that Chevron tankers are still sailing to the United States under a previous authorization from the US government.

At the same time, most other Venezuelan exports remained halted on Wednesday, although state oil company PDVSA resumed loading shipments of crude and fuel after operations were suspended due to a cyberattack, according to sources and customs data.

It remains unclear how any US blockade would be enforced. The US Coast Guard took an unprecedented step last week by seizing a Venezuelan oil tanker, and sources said the United States is preparing to carry out further similar interceptions.

Venezuelan oil accounts for about 1% of global oil supply.