Oil prices in the US have increased on expectations of tighter supplies worldwide due to sanctions imposed on Venezuelan oil firm PDVSA and production cuts led by Organization of the Petroleum Exporting Countries (OPEC).

International Brent crude oil futures increased by 0.4% at $62.72 a barrel, while US West Texas Intermediate (WTI) crude futures also rose by 0.4% at $54.77 per barrel, Reuters reported.

According to analysts, sanctions imposed by the US on Venezuela’s PDVSA had focused market attention on tighter supplies of crude worldwide.

Commonwealth Bank of Australia mining and energy analyst Vivek Dhar was quoted by the news agency as saying: “Fresh US sanctions on the country could see 0.5%-1% of global supply curtailed.”

“Fresh US sanctions on the country could see 0.5%-1% of global supply curtailed.”

Due to these imposed sanctions, oil transactions between Venezuela and other countries are expected to become limited.

Traders, shippers and Refinitiv Eikon data revealed that a flotilla loaded with about seven million barrels of Venezuelan oil has formed in the Gulf of Mexico.

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By GlobalData

Some of the tankers are loaded with cargoes that were bought ahead of the sanctions by the US and others whose buyers are weighing who to pay.

The sanctions were aimed at freezing US refiners from paying into PDVSA accounts controlled by Venezuelan President Nicolas Maduro.

Meanwhile, a Reuters survey found that in January, supply from the oil cartel OPEC declined, as Saudi Arabia and its Gulf partners overdelivered on the group’s agreement on reducing supplies.

Russian Energy Minister Alexander Novak said in a statement that the country has been in full compliance with its pledge to gradually cut its crude production.

Novak further added that oil production in January declined by 47,000 barrels a day from October.