Venezuela blockade poses limited upside to oil prices

The US blockade on sanctioned oil from Venezuela crystallises a key risk that has overshadowed the oil market in recent months. That said, the upside risks for oil prices are limited, not least because even a full loss of Venezuela’s exports would still be consistent with a large surplus in the global oil market next year. Meanwhile, although lower oil shipments would cut off a key lifeline for Venezuela’s economy in the near term, the lasting economic impact will depend on how tensions with the US evolve from here.