According to various sources, the United States may ease sanctions on Iran and Venezuela to allow more crude oil to flow from these countries.
Reuters reported unnamed sources familiar with the matter as saying that the US planned to relax its restrictions on the oil-for-debt swaps that were suspended two years ago as part of tighter sanctions on Venezuela. This would allow the Spanish firm Repsol and the Italian firm Eni, both of which have joint projects with Venezuela’s state-owned PDVSA oil company, to ship oil to Europe under the condition that it is not resold elsewhere.
Furthermore, Mike Muller, Vitol’s head of Asian operations, suggested to Bloomberg that the US Government may take a lighter approach to its sanctions on Iran to allow more oil to flow, saying:
“If the midterms are dominated by the need to get gas prices lower in America, turning a somewhat greater blind eye to the sanctioned barrels flowing out is probably something you might expect to see. US intervention in these flows has always been pretty sparse.”
Iran has been preparing to return to the international oil markets pending a successful outcome for its negotiations with the US, but these are currently stalled. A successful deal could lead to as much as a million extra barrels per day being available in the markets. Combined with the efforts of US producers like Chevron, the maker of Texaco lubricant products, this would help alleviate some of the shortfall resulting from the invasion of Ukraine.