Asian economies face the risk of renewed volatility in oil prices this year as analysts say the US capture of Venezuela’s leader Nicolas Maduro and uncertainty over Washington’s plans for the oil-rich South American country may unsettle investor sentiment.
On Monday morning, Benchmark Brent crude opened about 1.2 per cent lower near US$61 a barrel, before falling further to US$60.54 in the early afternoon, while US West Texas Intermediate crude declined by 0.5 per cent to US$57.04 a barrel.
The oil price movements followed the dramatic developments on Saturday in Caracas, where the US military removed Venezuelan leader Nicolas Maduro and moved him and his wife to New York.
Last year, oil prices dropped by almost 20 per cent, with crude falling to below US$60 a barrel for the first time in almost five years in December.
President Donald Trump said the US would effectively be “running” Venezuela with American companies involved in developing the South American country’s oil industry. Secretary of State Marco Rubio, however, said Washington was exploring tougher enforcement of an existing oil “quarantine” against Venezuela.
“History shows that forced regime changes in oil-producing countries often have material consequences for supply,” said Jorge Leon, head of geopolitical analysis at Rystad Energy, noting that political uncertainty in Venezuela was currently “extremely high.”