Abu Dhabi: Sanctions on Venezuelan exports as well as non-extension of Iran sanction waivers could help oil prices rise higher, analysts said.

Oil prices rose by 3 per cent on Friday largely due to sanctions on Venezuelan oil exports by the US administration following political turmoil in the South American nation.

“Geo-political factors will continue to play a significant role in oil prices. If the sanctions against Venezuela coincides with the non-extension of waivers against Iran at the same time it will have a profound upward effect on oil prices,” said Jaafar Al Taie, managing director of UAE based Manaar Energy Group speaking to Gulf News.

He, however, said the surge in US shale oil production could offset supply shortages that could arise due to sanctions on Venezuela and Iran putting downward pressure on oil prices.

“All depends if the Trump administration is going to time the sanctions to include Venezuela and Iran at the same time. If they do it in stages, then the market will absorb that because during that time, you could see it offset by rising US production, and even Russian production,” said Al Taie.

US administration is expected to take a decision in the coming days whether to extend waivers given to eight countries that import oil from Iran.

In November, US reimposed sanctions on Iranian oil exports while allowing top customers such as China and India to keep buying crude oil from the Islamic Republic until six months.

Al Taie also said policies of US president Donald Trump against both Venezuela and Iran will have a higher effect on oil markets than production cuts being implemented by Opec (Organisation of the Petroleum Exporting Countries) countries.

Opec and its allies are currently cutting production by 1.2 million barrels per day to support oil prices. Top producers, Saudi Arabia and Russia have both pledged lesser supplies to rebalance oil markets.

Global benchmark Brent is expected trade in the range between $50 (Dh183.61) and $70 per barrel in the first quarter of 2019.

“We don’t see the volatility going beyond that at this stage but there are so many complexities in terms of sequences, it is very difficult to predict price.”

Brent was up by 3.14 per cent at $62.75 per barrel when markets closed on Friday while US crude West Texas Intermediate was trading at $55.26 per barrel, up by 2.73 per barrel.