Oil declines amid hopes for easing US sanctions on Venezuela

Oil prices fell slightly on Tuesday after falling by more than a dollar on Monday amid hopes that the United States will ease sanctions on oil producer Venezuela and as Washington intensifies its efforts to prevent an escalation of the war between Israel and Hamas.

By 0333 GMT, Brent crude futures fell five cents to $89.60 a barrel. US West Texas Intermediate crude also fell 23 cents to $86.43 a barrel.

The government and opposition in Venezuela are set to resume long-stalled talks on Tuesday, which President Nicolas Maduro has said will benefit the next elections in 2024, multiple sources said, a move that could lead to Washington easing sanctions.

Since 2019, the United States has imposed sanctions on oil exports from Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), to punish Maduro’s government after the 2018 elections, which Washington saw as a sham due to human rights violations.

The two benchmarks rose last week due to fears of a widening conflict in the Middle East, with Brent crude rising 7.5 percent, the highest weekly gain since February.

US President Joe Biden will visit Israel on Wednesday at a time when the country is preparing to escalate its attack against Hamas fighters, which has caused a humanitarian crisis in Gaza and raised fears of a broader conflict with Iran.

The Biden administration is seeking to find ways to increase the flow of oil to global markets to limit rising prices. But any real increase in oil production by Venezuela will take time due to the recent lack of investment.