Oil Prices Ease as Potential US-Venezuela Deal Adds to Supply Outlook

Oil prices dipped in early trading Friday, pressured by reports of a potential deal that would grant the U.S. long-term access to Venezuela's substantial oil reserves, raising the prospect of increased global supply.

US Nears Deal for Venezuelan Reserves

The Trump administration is reportedly close to finalizing an agreement for long-term access to a portion of Venezuela's crude reserves, according to a Reuters report on Thursday. The deal would allow American companies to develop a group of Venezuelan oilfields, potentially boosting future output.

Market analysts caution, however, that any significant increase in supply would likely take considerable time due to the extensive development required for Venezuela's oil infrastructure. Adding to the supply narrative, a separate report indicated Venezuela is considering leaving the Organization of the Petroleum Exporting Countries (OPEC) amid its strengthening relationship with Washington.

Market Impact and Weekly Performance

Investor sentiment on the potential for new supply weighed on futures contracts. Key benchmarks were set for substantial weekly declines despite a rebound in the previous session.

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• Brent oil futures fell 0.3% to $89.45 a barrel.
• West Texas Intermediate (WTI) crude futures declined 0.2% to $83.39 a barrel.

Both contracts were on track to lose between 4% and 5.5% for the week, reflecting broader market concerns over supply and geopolitical developments.

Geopolitical Factors Remain in Focus

The week's downward price pressure was also influenced by mixed signals regarding the Strait of Hormuz. Earlier reports that Iran and Oman had agreed to allow some traffic through the critical waterway, which supplied about a fifth of the world's oil before the U.S.-Iran conflict, initially sent prices lower.

However, crude prices trimmed some of those losses on Thursday. The Wall Street Journal reported that President Trump had no interest in returning to a June peace deal with Iran, tempering expectations for a swift resolution and reopening of the channel.