Brent gains after US seizes two more Venezuela-linked vessels

The front-month ICE Brent contract has gained by $2.38/bbl on the day, to trade at $62.48/bbl at 09.00 GMT.

IMAGE: Oil pump jacks. Getty Images

Upward pressure:

Brent’s price has moved higher after the US Coast Guard seized two tankers, allegedly carrying sanctioned Venezuelan oil.

The first tanker, MV Bella 1, was seized in the northern Atlantic Ocean, while the second vessel, MT Sophia, was captured in the Caribbean Sea.

“The control that the US intends to exert over the Venezuelan oil industry also raises questions over the future of Venezuela’s membership within OPEC,” two analysts from ING Bank said.

The move comes days after Washington detained Venezuelan President Nicolas Maduro from the country’s capital Caracas.

“This action adds some supply risk to the market in the short term,” ING Bank’s analysts added.

Downward pressure:

Brent’s price gains were partially capped by uncertainty surrounding Venezuela’s oil assets, according to market analysts.

Earlier this week, US President Donald Trump said Venezuela’s interim administration will be “turning over” between 30 million to 50 million bbls of sanctioned oil, to be sold at the market price.

The end of Maduro's presidency in Venezuela could add fresh barrels to an already oversupplied market, analysts said.

“A smooth transition means the potential for stronger Venezuelan supply,” ING Bank’s analysts added.

By Aparupa Mazumder

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