US Secretary of State Marco Rubio on Sunday said Washington would continue to enforce an existing “oil quarantine” against Venezuela.
In Manila, the Department of Energy and oil industry players have warned of a possible oil price spikes in the following days after the U.S. attack on oil-rich Venezuela. Rino Abad, director of the DOE’s Oil Industry Management Bureau, said oil reports indicate almost no exports are currently leaving Venezuela.
Meanwhile, domestic oil firms on Tuesday raised the prices of diesel and kerosene by P0.20 per liter and P0.10 per liter, respectively, effective 6 a.m. to reflect the movement of prices in the world market. However, gasoline decreased by P0.10 per liter.
“We continue with that quarantine, and we expect to see that there will be changes, not just in the way the oil industry is run for the benefit of the people, but also so that they stop the drug trafficking,” Rubio said.
The blockade on sanctioned oil tankers, some of which have been seized by the US, “remains in place, and that’s a tremendous amount of leverage that will continue to be in place until we see changes that not just further the national interest of the United States, which is number one, but also that lead to a better future for the people of Venezuela,” he added.
“The affected volume is estimated between one million and two million barrels per day lost to global supply,” Abad said. “The most likely effect is to increase prices.”
Leo Bellas, president of Jetti Petroleum, said geopolitical risks could push premiums and freight rates higher.”
Seaoil Philippines and Jetti Petroleum issued separate announcements of the latest price movement while other companies are expected to follow.
Oil edged down Monday as investors assess the outlook after US forces attacked Venezuela early Saturday, bombing military targets and spiriting away Maduro and his wife to face federal charges in New York.
Venezuela has the world’s largest proven oil reserves, and more Venezuelan crude in the market could exacerbate oversupply concerns and add to recent pressure on prices.
Trump said the United States will now “run” Venezuela and send US companies to fix its dilapidated oil infrastructure.
But analysts say that alongside other major questions about the South American country’s future, substantially lifting its oil production will not be easy, quick or cheap.
After years of under-investment and sanctions, Venezuela pumps around one million barrels per day, down from around 3.5 million in 1999.
“Any recovery in production would require substantial investment given the crumbling infrastructure resulting from years of mismanagement and underinvestment,” UBS analyst Giovanni Staunovo told AFP.
Investing today also holds little appeal as oil prices are weighed down by a supply glut, and fell last year. With AFP
