MOSCOW, January 3. /TASS/. The US military operation against Venezuela could trigger a short-term rise in oil prices to $70-80 per barrel, editor-in-chief of InfoTEK Alexander Frolov told TASS.
The price of March Brent crude futures stood at $60.8 per barrel at the close of trading on January 1 on London’s ICE exchange.
"The oil market may react sharply in the immediate term, with prices surging. However, a pullback can be expected just as quickly, since in real terms Venezuelan production has a negligible impact on global supply," he said.
"If global agencies suddenly start saying that the global oil market will stabilize specifically without Venezuela and that the surplus of supply predicted by international agencies will not materialize, then prices could return to the $70-80 per barrel range. That effect, however, would be driven exclusively by verbal interventions," the expert added.
Frolov explained that Venezuela only nominally possesses the world’s largest oil reserves, as this indicator does not translate into actual production volumes due to high production costs and sanctions pressure.
According to the expert, sanctions have affected about 0.5 mln barrels per day of output, while persistently high costs over more than a decade of crises have resulted in losses exceeding 1 mln barrels per day.
On January 3, Venezuelan Foreign Minister Yvan Gil Pinto said that the United States had attacked civilian and military facilities in Caracas, describing Washington’s actions as military aggression. A state of emergency has been imposed in Venezuela. US President Donald Trump confirmed that the United States had carried out large-scale strikes on Venezuela. According to him, the country’s leader, Nicolas Maduro, along with his wife, was captured and taken out of the country.