Oil prices are hovering around their lowest point for the year despite the unexpectedly severe impact of US sanctions on Russia’s oil exports and its blockade of tankers entering or leaving Venezuelan ports.

Brent crude, which traded below $US59 ($88) a barrel last week before reports of progress in Ukrainian peace talks lifted prices above $US60 a barrel, is still trading at less than $US62 a barrel despite a rising volume of stranded Russian oil.

An Iranian oil tanker at anchor near a refinery in Puerto Cabello, Venezuela, before the US began targeting similar vessels.Credit: AP

With the Trump administration seizing two sanctioned tankers off the Venezuelan coast and chasing a third, Venezuela’s oil exports are shrinking. Where, earlier this year, it was exporting more than a million barrels a day, exports are now down to less than 800,000 barrels and falling as tankers steer clear of its coast.

The impact of what analysts think could be the withdrawal of about 500,000 barrels a day of Venezuelan oil, as a result of the US chokehold, is less significant for the market and oil price than what’s happening to Russia’s exports. (Venezuelan oil represented only about one per cent of global supply even at its peak this year.)

Russia’s exports have been hit hard by the US sanctions on its two major oil companies in late October, and the fear of being subjected to financial sanctions is chilling Indian and Chinese importation of Russia’s oil and driving the prices of its flagship Urals oil to its lowest levels since the pandemic.

Urals shipped from the Baltic ports traded below $US35 a barrel last Friday, while that shipped from the Black Sea was priced........

© The Sydney Morning Herald