iMetal

Benchmark crude oil prices could be impacted significantly by escalating military tensions between the U.S. and Venezuela, with the Trump administration tightening pressure on Nicolas Maduros’ regime and signaling the possibility of a U.S. incursion.
That’s what Rystad Energy stated in a market update sent to Rigzone by the Rystad Energy team late Thursday, adding that Venezuela currently produces 1.1 million barrels per day of crude oil, “placing this volume at risk depending on the scale of military activity”.
“Although the volume is small in terms of global trade flows, the quality is unique as over 67 percent of the output is heavy,” Rystad highlighted in the update.
Rystad Energy’s Head of Geopolitical Analysis, Jorge Leon, noted in the update that “the loss of Venezuelan volumes would likely result in stronger crude oil prices in the Pacific Basin, with China and India dependent on the heavy supply”.
“Dubai prices are likely to develop stronger premiums to Brent crude while other heavy grades will strengthen against the light grades. Some upward movement in Brent and West Texas Intermediate (WTI) prices is also expected with the overall loss of Venezuelan supply,” he added.
Leon went on to warn in the update that volatility in the region is unlikely to subside in the immediate term.