US-Venezuela tensions cast impact on global crude oil prices:Futures contracts rise on MCX; Brent trades at $60 per barrel

Crude oil prices saw a small increase in futures trading on Monday, 5 January, 2025. The price of January delivery contracts of crude oil rose by ₹42 to ₹5,197 per barrel on the Multi Commodity Exchange (MCX). February contracts also saw a similar increase. Geopolitical Tensions in Venezuela Add to Concerns: The rise in prices is partly due to worries about what’s happening in Venezuela. Recent US military actions and the situation with President Nicolas Maduro are making investors cautious. Venezuela has the world’s largest oil reserves, so any instability there can affect global oil supplies. Limited Immediate Impact, Potential for Future Supply Issues While Venezuela’s current oil production is low (less than 1% of global output), there are concerns about future disruptions. If the US puts more pressure on other oil-producing countries like Iran, it could tighten the oil supply later in the year. US Eyes Venezuela’s Oil Industry Revival Interestingly, the US government is encouraging American companies to help revive Venezuela’s oil industry. This could be a way for these companies to get compensation for assets taken from them in the past. Market Sentiment Remains Cautious Overall, the market is being careful due to the uncertainty surrounding Venezuela and potential future supply issues. Investors are keeping a close eye on geopolitical developments and how they might impact the global oil market.