Venezuela sanctions and high oil demand push prices back up to $80
Oil prices reached $80 (£59) per barrel again today as the tight supply of oil on the market continues and Trump reveals he intends to impose sanctions on Venezuela.
Brent crude, which reached a four-year high last week went it surpassed $80, has seen a significant increase over the past few weeks starting with President Trump's decision to pull the US out of Iran nuclear deal.
However, new uncertainty is rising after the US announced that it will impose new sanctions on Venezuela after the Trump administration's comments that the country's election was fraudulent.
Read more: Opec will not increase oil supply, calling price surge short-term spike
Mihir Kapadia, chief executive of Sun Global Investment, said that “it is all politics at the moment” affecting the oil price as Venezuela is the main producer of oil in South America.
Venezuela, which is a member of the Organisation of the Petroleum Exporting Countries (Opec), has suffered a severe decline in oil production recently due to lack of investment in the industry and now production is expected to be weakened even more when US sanctions are imposed.
Demand in oil has grown substantially while a large portion of the supply, mostly from Iran, has gone off the market, causing prices to surge in the past few weeks.
On the large scale, Kapadia did not think it would have a lasting impact saying that the Iran decision left more of a mark as almost 2m barrels per day went off the market, but that the market will recover from the decline in barrels from Venezuela.
He also thinks that oil prices are about to peak around $82 Brent crude and does not think it will surpass $100 which several experts predicted earlier this month.
On Sunday, Nicolas Maduro was re-elected as President for a second term. However, several nations have accused him of election fraud and vote buying which has led to his rival candidates demanding a new election.
Read more: Oil prices surge to new high as 2m Iranian barrels go off the market
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