Analysis: Are Trump’s intentions in Iran linked to his actions in Venezuela – and oil?
By James Sillars, business and economics reporter
Oil prices are on the move.
The upwards shifts can be traced back to the Trump administration’s extraordinary seizure of Venezuela’s president on 3 January.
Brent crude stood at $60 a barrel at the start of the year. It’s now at $63.
The previous few months had seen global oil values suppressed by fears of supply outstripping demand.
That narrative has now changed, but in a subtle way.
The prospect of US intervention in Iran has added to fears that limited supplies of so-called heavy oil could become squeezed even further.
The US says it is currently controlling sales of Venezuelan crude – oil it needs due to the fact that it mainly produces only light oil domestically.
Venezuela’s output is comparatively small, but it has the biggest reserves of heavy oil among oil-producing nations.
It explains why Donald Trump is wooing US oil firms in a bid to secure (risky) investment in boosting Venezuelan extraction.
America needs that oil and wants it on the cheap.
So it begs the question: Is there anything in it for Trump to help the protesters end clerical rule in Iran?
While there are obvious advantages in terms of regional stability, as far as the White House is concerned, potential economic reasoning is less clear.
You could see it as a hedge against US oil firms declining to take the plunge in Venezuela?
But by taking action in Iran, the US could also punish China – its biggest trade rival – further.
China, according to Kpler data reported by the Reuters news agency, was the biggest single importer of Venezuelan crude last year and had been looking to Iran to help fill the void left by the new US controls on that oil.
Trump might just see the overthrow of Iran’s regime as another trade war win, securing another potential oil supply bonus in the process.