ISLAMABAD
Crude oil futures inched up on Tuesday amid supply risks from the Israel-Gaza war after going down a session earlier.
As of 1235 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.31 (+0.35 percent) to reach $89.96 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.20 (+0.23 percent) to $86.86 a barrel.
However, the price of Russian Sokol decreased by $0.29 (-0.35 percent) to $82.82. Arab Light prices witnessed a decrease of $0.05 (-0.05 percent) to reach $93.44 a barrel. On the other hand, the price for Opec Basket increased to $91.62 a barrel with a gain of $2.19 (+2.45 percent).
The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Traders are concerned about the Israel-Hamas war escalating into a broader regional conflict, potentially affecting crude supplies in an already tight market.
However, US President Joe Biden will make a high-stakes visit to Israel on Wednesday as the country prepares to escalate an offensive against Hamas that has set off a humanitarian crisis in Gaza and raised fears of a broader conflict with Iran.
Biden warned that a long-term Israeli occupation of Gaza would be a “big mistake”. His trip may be a balancing act between showing support for Israel’s war on Hamas and trying to rally Arab states to help head off a wider regional war, after Iran pledged preemptive action from the resistance front of its allies which include the Hezbollah movement in Lebanon.
Meanwhile, Venezuela’s government and opposition are set to resume long-suspended talks on Tuesday which President Nicolas Maduro said would benefit the 2024 election, a move that could lead to Washington easing sanctions. Since 2019, the US has sanctioned oil exports from Venezuela, a member of the Organization of Petroleum Exporting Countries (OPEC), to punish Maduro’s government following elections in 2018 that Washington considered a sham. Last year, American oil company Chevron was allowed to expand its operations in Venezuela and ship crude oil to the US.
The US government has been seeking ways to increase the flow of oil to world markets to alleviate high prices. But any real oil output increase by Venezuela will take time due to lack of recent investments.
