Oil prices steady as market assesses mounting risks to supply
By Enes Tunagur and Stephanie Kelly
LONDON, Dec 18 (Reuters) - Oil prices steadied on Thursday as investors assessed the likelihood of further U.S. sanctions against Russia and the supply risks posed by a blockade of Venezuelan oil tankers.
Brent crude LCOc1 was up 31 cents, or 0.5%, to $59.99 per barrel at 1344 GMT. U.S. West Texas Intermediate crude CLc1 was up 40 cents, or 0.7%, at $56.34 per barrel.
The United States' intentions to impose more sanctions against Russia and its threatened blockade of tankers under sanctions and carrying Venezuelan oil pushed prices higher, PVM analyst John Evans said.
On Wednesday, Bloomberg reported that the U.S. is preparing another round of sanctions on Russia's energy sector in the event Moscow does not agree to a peace deal with Ukraine, citing people familiar with the matter. A White House official told Reuters President Donald Trump had not made any decisions on Russian sanctions.
RISKS TO SUPPLY MOUNT
Further measures targeting Russian oil could pose a greater supply risk to the market than Trump's announcement on Tuesday that the U.S. would blockade tankers under sanctions entering and leaving Venezuela, ING analysts said in a note.
Meanwhile, Britain imposed sanctions on 24 individuals and entities as part of its Russia sanctions regime, including on Russian oil companies Tatneft TATN.MM and Russneft, a government notice showed on Thursday.
The Venezuela blockade could affect 600,000 barrels per day of Venezuelan oil exports, mostly to China, but 160,000 bpd of exports to the U.S. would likely continue, ING said. Chevron CVX.N vessels were continuing to depart for the U.S. under a previous authorisation from the U.S. government.
It was not clear how a U.S. blockade would be enforced. The U.S. Coast Guard last week took the unprecedented step of seizing a Venezuelan oil tanker and sources said the U.S. was preparing for more such interdictions.
Venezuelan crude makes up around 1% of global supplies.
Analysts at the Bank of America anticipate the lower price of oil will reduce the amount of supply. If WTI prices average $57 a barrel in 2026, in line with their projection, U.S. shale oil production could contract by 70,000 barrels per day.
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