- Oil is trading lower despite increased tensions in the Middle East
- The prompt WTI contract advanced $4.60/Bbl to more than $78/Bbl last week, marking the second consecutive week of higher prices
- The Federal Reserve will be meeting on Wednesday to discuss potential interest rate policy changes
- Tanker carrying Russian fuel hit in the Red Sea, and US forces attacked in Iraq (BBG)
- On Friday, a missile fired by the Houthi militants struck a tanker in the Red Sea transporting a cargo of Russian fuel, despite the Houthis saying they would not be attacking any Russian cargos
- The attack could lead to a further reduction in ship traffic in the Red Sea
- Over the weekend, three US soldiers were killed in a drone attack in Jordan launched by Iranian-backed militants, prompting the US to promise a response to the attack
- US unlikely to return all Venezuelan sanctions (BBG)
- Last year, the US suspended sanctions on Venezuela after President Maduro promised free and fair elections, which resulted in higher oil exports to the US
- Last week, Venezuela’s top court upheld a ban on several members of the opposition party from holding office, dimming hopes that Maduro would follow through with the election promise
- However, experts view US sanctions on Venezuela’s oil industry as unlikely to return
- Francisco Monaldi of Rice University’s Baker Institute of Public Policy said, “It is highly unlikely that the Biden Administration will reimpose the same oil sanctions scheme that existed”, and that sanctions on the country’s gold industry are more likely
