Oil prices are set to yoyo.
Well like most things in life, it’s politics. Or more precisely geopolitics.
Trump’s focus on the US oil industry, increased output from OPEC members and Russia’s burgeoning exports to China have all played their part. After all, when supply goes up, a drop in price is usually not too far behind.
However, analysts are predicting that Venezuela is going to reverse this price decline.
As one of the biggest global exporters of the stuff, it’s suffering from internal political turmoil: the recent election for an assembly that will rewrite the constitution and give more powers to the president was rigged and lacked opposition participation. With many calling it a power grab by President Maduro, there’s a fear that Venezuela will become more authoritarian. Consequently, the talk of sanctions being imposed by the US is getting louder.
Sanctions of course fits well with Trump’s “America first” economic policy: American jobs and businesses should be prioritised and protected, even if it means harming trade relations with others. And he’s desperate to grow the US oil industry, even at the expense of renewables.
What do sanctions mean?
Reduced access to the market for a lot of oil and a price rise on the horizon.