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Oil Prices Likely to Move Higher on Venezuelan Turmoil, Ample Supply to Cap Gains

FILE PHOTO: The Guinea-flagged oil tanker MT Bandra, which is under sanctions, is partially seen alongside another vessel at El Palito terminal, near Puerto Cabello, Venezuela December 29, 2025. Photo: REUTERS/Juan Carlos Hernandez/File Photo

Oil prices are likely to move higher when benchmark futures resume trading later on Sunday on concern that supply may be disrupted after the United States snatched Venezuelan President Nicolas Maduro from Caracas at the weekend and President Donald Trump said Washington would take control of the oil-producing nation.

There is plentiful oil supply in global markets, meaning any further disruption to Venezuela’s exports would have little immediate impact on prices, analysts said.

The US strike on Venezuela to extract the country’s president inflicted no damage on the country’s oil production and refining industry, two sources with knowledge of operations at state oil company PDVSA said at the weekend.

Since Trump imposed a blockade of sanctioned oil tankers entering or leaving Venezuelan waters and seized two cargoes last month, exports have fallen and have been completely paralysed since January 1.

That has left millions of barrels stuck on loaded tankers in Venezuelan waters and led to millions more barrels going into Venezuelan oil storage.

The OPEC member’s exports fell to around 500,000 barrels per day in December, around half of what they were in November. Most of the December exports took place before the embargo. Since then, only exports from Chevron of around 100,000 bpd have continued to leave Venezuela. The global oil major has US authorization to produce and export from Venezuela despite sanctions.

The embargo prompted PDVSA to begin cutting oil output, three sources close to the decision said on Sunday, because Venezuela is running out of storage capacity for the oil that it cannot export. PDVSA has asked some of the joint ventures that are operating in the country to cut back production, the sources said. They would need to shut down oilfields or well clusters.

Trump said on Saturday that the oil embargo on Venezuelan exports remained in full effect. If the US government loosens the embargo and allows more Venezuelan crude exports to the US Gulf, there are refiners there that previously processed the country’s oil.

The weekend’s events were unlikely to materially alter global oil markets or the global economy given the US strikes avoided Venezuela’s oil infrastructure, said Neil Shearing, group chief economist at Capital Economics.

“In any case, any short-term disruption to Venezuelan output can easily be offset by increased production elsewhere. And any medium-term recovery in Venezuelan supply would be dwarfed by shifts among the major producers,” he said in a note.

Trump also threatened on Friday to intervene in a crackdown on protests in Iran, another OPEC producer, ratcheting up geopolitical tensions. Trump on Friday said “we are locked and loaded and ready to go,” without specifying what actions he was considering against Tehran, which has seen a week of unrest as protests over soaring inflation spread across the country.

“Prices may see modest upside on heightened geopolitical tensions and disruption risks linked to Venezuela and Iran, but ample global supply should continue to cap those risks for now,” said Ole Hansen, head of commodities research at Saxo Bank.

On Sunday, the Organization of the Petroleum Exporting Countries and their allies agreed to maintain steady oil output in the first quarter, OPEC+ said in a statement. Both Venezuela and Iran are members of OPEC. Several other members of OPEC+ are also embroiled in conflict and political crises.

The producer group has put increases in production on pause for the first quarter after raising output targets by around 2.9 million barrels per day from April to December 2025, equal to almost 3% of world oil demand.

Brent and US crude futures settled lower on Friday, the first day of trading of 2026, as investors weighed oversupply concerns against geopolitical risks. Both contracts closed 2025 with their biggest annual loss since 2020 marked by wars, higher tariffs, increased OPEC+ output and sanctions on Russia, Iran and Venezuela.

VENEZUELA

“The political transition in Venezuela adds another major layer of uncertainty, with elevated risks of civil unrest and near-term supply disruptions,” said Jorge Leon, head of geopolitical analysis at consultancy Rystad Energy and a former OPEC official.

“In an environment this fragile, OPEC+ is choosing caution, preserving flexibility rather than introducing new uncertainty into an already volatile market.”

Trump said on Saturday that the US would control the country until it could make an orderly transition, but an interim government led by vice president and oil minister Delcy Rodriguez remains in control of the country’s institutions, including state energy company PDVSA, with the blessing of Venezuela’s top court.

A top Venezuelan official said on Sunday that the country’s government would stay unified behind Maduro amid deep uncertainty about what is next for the Latin American country.

Trump said that American oil companies were prepared to reenter Venezuela and invest billions of dollars to restore production there.

Venezuela is unlikely to see any meaningful boost to crude output for years even if US oil majors do invest the billions of dollars in the country that Trump has promised, analysts said.

“We continue to caution market observers that it will be a long road back for the country, given its decades-long decline under the Chávez and Maduro regimes, as well as the fact that the US regime change track record is not one of unambiguous success,” Helima Croft, RBC Capital’s head of commodities research, said in a note.

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War with Iran puts the US-Israel alliance at grave risk

The Iran war is strategically sound yet politically unsupported — an unstable foundation for a gamble that could reshape the Middle East. That creates danger for Israel, which needs the support of an American public that is rapidly drifting away.

For decades, the country’s greatest strategic asset has not been its military technology or intelligence capabilities — spectacular as these are — but rather the political, diplomatic and military backing of the United States. That relationship has not been merely transactional. It was supposed to rest on shared values and deep public support across the American political spectrum.

If that support erodes or disappears, Israel’s strategic environment will fundamentally change. To be blunt: it will not be able to arm its military. This creates a paradox. A campaign that has so far demonstrated extraordinary value for the Jewish state also stands a risk of fundamentally weakening it.

An alliance at its strongest

The conflict has showcased the depth of the current U.S.–Israel alliance. To many observers, and critically to Israel’s enemies, the operation has underscored not only Israel’s capabilities but also the reality that it stands alongside the world’s most powerful state.

The strikes have projected deep into Iranian territory, revealed astonishing intelligence penetration, and destroyed or degraded key threats. Israel’s enemies across the region have already been weakened by previous rounds of fighting since Oct. 7, and the current operation has reinforced the impression that Israel can reach its adversaries wherever they operate.

Moreover, Iran’s regime has managed to isolate itself to the point where most Arab countries are in effect on the side of Israel and the U.S. That projection — of an unbreakable and strong alliance – may ultimately be the most important strategic element of this war.

But therein lies the rub.

The political foundations of American support for Israel are eroding, which means the very element that currently strengthens Israel’s deterrence — American participation — may also be the one most at risk.

A just war, unjustified

Americans do not understand why their country is at war.

A Reuters/Ipsos survey conducted at the start of the conflict found only 27% of Americans supported the U.S. action, while 43% opposed it. Other surveys show similar results, with roughly six in ten Americans against the military intervention.

In modern American history that is highly unusual. Most wars begin with a “rally around the flag” moment when public support surges. Even conflicts that later became controversial — from Afghanistan to Iraq — initially enjoyed majority backing.

This one did not — in part because the case for it has not been made clearly to the public.

That error is compounded by years of polarization in American politics; declining trust in institutions and leadership; and the record of President Donald Trump, who has spent years spreading conspiracy theories and demonstrating a remarkable indifference to factual truth. It is no exaggeration to say that many Americans do not believe a word he says – which is perhaps unprecedented.

When a president with that record launches a war, at least half the country assumes the worst. Even if the strategic logic is sound, the credibility deficit remains.

The tragedy is that the war is, in fact, eminently justifiable. The Islamic Republic has long since forfeited the moral legitimacy that normally shields states from outside force. It brutally suppresses its own population, jailing and killing protesters, policing women’s bodies, and crushing dissent with an apparatus of repression. Its foreign policy is not defensive but revolutionary. Through proxy militias it has destabilized Iraq, Syria, Lebanon and Yemen, as well as the Palestinian areas, in some cases for decades.

The regime has pursued nuclear weapons through a series of transparent machinations, deceptions and brinkmanship. Negotiations have repeatedly been used as delaying tactics while enrichment continued. Any deal that relieved sanctions would not simply reduce tensions; it would also inject new resources into a system dedicated both to repression at home and aggression abroad — one that is despised by the vast majority of its own people, as murderous dictatorships inevitably will be.

There is a doctrine in international law known as the Responsibility to Protect — the principle that when a state systematically brutalizes its own population, the international community may have the right, even the obligation, to act. By that standard, the Iranian regime has been skating on thin ice for years.

But with this clear rationale left uncommunicated, the politically dangerous perception has spread that the U.S. was reacting to Israel rather than acting on its own strategic judgment.

A perilous future

If Americans come to believe that Israel caused a costly war that they did not support in the first place, the backlash could be severe.

For centuries, one of the most persistent antisemitic tropes has been the accusation that Jews manipulate powerful states into fighting wars on their behalf. The suggestion that Israel can pull the U.S. into conflict feeds directly into that mythology. Once such perceptions take hold, they can be extremely difficult to reverse.

Even people who reject antisemitism outright can absorb a softer version of the same idea: that American interests are being subordinated to Israeli ones. In a political environment already marked by growing skepticism toward Israel, that perception risks deepening the erosion of support that has been underway for years.

Secretary of State Marco Rubio seemed to inadvertently feed such notions by suggesting in recent days that the U.S. had to attack Iran because Israel was going to do so “anyway,” and then America would have been a target. It was a short path from that to conspiracy theorists like Tucker Carlson blaming Chabad for the war.

A future Democratic president, facing a base that appears to have abandoned Israel, may feel far less obligation to defend it diplomatically or militarily. Even a Republican successor could prove unreliable if the party continues its drift toward isolationism.

That likelihood is compounded by studies showing that a large part of the U.S. Jewish community itself no longer backs Zionism. That process is driven by Israel’s own policies, including the West Bank occupation and the deadly brutality of the war in Gaza.

So the very war that is showcasing the best the U.S.-Israel alliance has to offer is also at risk of fundamentally damaging that partnership. Particularly if Prime Minister Benjamin Netanyahu — the rightful object of much American ire — manipulates the Iran campaign into an electoral victory this year, the alliance’s greatest success could also be its undoing.

The post War with Iran puts the US-Israel alliance at grave risk appeared first on The Forward.

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Report: Iran’s New Military Plan Is Regime Survival Through Regional Escalation

Members of the Islamic Revolutionary Guard Corps (IRGC) attend an IRGC ground forces military drill in the Aras area, East Azerbaijan province, Iran, Oct. 17, 2022. Photo: IRGC/WANA (West Asia News Agency)/Handout via REUTERS

i24 NewsAfter last year’s devastating conflict with the United States and Israel, Iranian leaders have reportedly adopted a major strategic shift aimed at expanding the war across the Middle East to secure the regime’s survival, according to the Wall Street Journal.

Previously, Iran responded to foreign strikes with limited, targeted reprisals. The new doctrine abandons that approach, aiming instead to escalate the conflict regionally, particularly against Gulf Arab states and critical economic infrastructure. The goal is to disrupt the global economy and pressure Washington into shortening the war.

This decision followed the twelve-day war with Israel in June 2025, during which Israeli and US strikes eliminated senior Iranian military leaders, destroyed key air defense systems, and severely damaged nuclear facilities. In response, Supreme Leader Ali Khamenei—before his elimination early in the current conflict—activated a strategy designed to maintain continuity even if top commanders were neutralized.

Central to this approach is the so-called “mosaic defense” doctrine: a decentralized military structure in which the Islamic Revolutionary Guard Corps (IRGC) operates through multiple regional command centers. Each center can conduct operations independently, allowing local commanders to continue fighting even if national leadership is incapacitated. This makes the military apparatus more resilient to targeted strikes.

Following the adoption of this doctrine, Iran quickly expanded hostilities, launching missile and drone attacks on the UAE, Qatar, Bahrain, and critical energy and port infrastructure. The strategy also aims to disrupt key trade routes, including the Strait of Hormuz, through which roughly one-fifth of the world’s oil passes.

Analysts cited by the Wall Street Journal suggest that Tehran’s calculation is to make the conflict costly enough for all parties to force the US and its allies into a diplomatic resolution.

However, the plan carries enormous risks. By escalating attacks on regional states and international economic interests, Iran could provoke a broader coalition against itself. Despite prior military losses, Iranian forces retain the capability to launch drone and missile strikes, maintaining their influence over the ongoing conflict.

For Iranian leaders, the immediate priority remains unchanged: the survival of the regime, even if it requires a major regional escalation.

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Katz Warns Lebanon to Disarm Hezbollah or ‘Pay a Heavy Price’

Israel’s Defense Minister Israel Katz and his Greek counterpart Nikos Dendias make statements to the press, at the Ministry of Defense in Athens Greece, Jan. 20, 2026. Photo: REUTERS/Louisa Gouliamaki

i24 NewsIsraeli Defense Minister Israel Katz on Saturday warned Lebanon’s leadership that it must act to disarm Hezbollah and enforce existing agreements, cautioning that failure to do so could lead to severe consequences for the Lebanese state.

Speaking after a high-level security assessment with senior military officials, Katz directed a message to Lebanese President Joseph Aoun, saying Beirut had committed to enforcing an agreement requiring Hezbollah’s disarmament but had failed to follow through.

“You pledged to uphold the agreement and disarm Hezbollah — and this is not happening,” Katz said. “Act and enforce it before we do even more.”

The meeting took place in Israel’s military command center and included Chief of Staff Lt. Gen. Eyal Zamir and other senior defense officials, as Israel continues operations on multiple fronts.

Katz emphasized that Israel would not tolerate attacks on its communities or soldiers from Lebanese territory.

“We will not allow harm to our communities or to our soldiers,” he said. “If the choice is between protecting our citizens and soldiers or protecting the State of Lebanon, we will choose our citizens and soldiers — and the Lebanese government and Lebanon will pay a very heavy price.”

The defense minister also referenced Hezbollah’s leadership, warning that the group’s current chief could lead Lebanon into further destruction.

“If Hassan Nasrallah destroyed Lebanon, then Naim Qassem will destroy it as well,” Katz said.

Katz stressed that Israel has no territorial ambitions in Lebanon but said it would not accept a return to the years in which Hezbollah launched repeated attacks on Israel from Lebanese territory.

“We have no territorial claims against Lebanon,” he said. “But we will not allow Lebanese territory to again become a platform for attacks against the State of Israel.”

He concluded with a warning to Lebanese authorities to take action against Hezbollah before Israel escalates its response.

“Do and act before we do even more,” Katz said.

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