Joe Biden expected to ease sanctions on oil from Iran and Venezuela

Joe Biden appears to be ready to allow more oil to flow out of Iran and Venezuela as fuel shortages force the West to take a softer approach to its political foes.

 Patrick Semansky /AP joe biden - Patrick Semansky /AP

The US could permit two European oil companies – Italy’s Eni and Spain’s Repsol – to ship Venezuelan oil to Europe as soon as next month, reports said.

Separately, the White House may allow Iranian oil on to global markets even if the Middle Eastern country does not make further assurances over its nuclear programme, according to an executive from Vitol said, the world’s biggest independent crude trader.

Vitol’s Asia head Mike Muller said: “Uncle Sam might just allow a little bit more of that oil to flow.

“If the midterms are dominated by the need to get gas prices lower in America, turning a somewhat greater blind eye to the sanctioned barrels flowing out is probably something you might expect to see. US intervention in these flows has always been pretty sparse.”

Meanwhile, sources told Reuters that the amount of oil being sold by Venezuela “is not large”, and is expected to have only a modest impact on global prices. They added it might help reduce European reliance on oil, and also draw Venezuelan president Nicolas Maduro back into political talks with the country’s opposition.

It will be imported on the condition that the oil “has to go to Europe,” one of the sources said.

Under the arrangements, Eni and Repsol would count the crude cargoes as offsetting unpaid debt and late dividends from their joint ventures with PDVSA, Venezuela’s state-run oil company.

A looser stance from Washington would provide a symbolic boost to Mr Maduro and authorities in Tehran, and shows the lengths US authorities are willing to go to relieve price pressures at home and allow allies to wean themselves off Vladimir Putin’s oil.

Mr Biden is facing a difficult round of elections in the autumn as his personal popularity dives amid soaring inflation and, in particular, high petrol prices.

Separately, French finance minister Bruno Le Maire said on Sunday that France is in talks with the United Arab Emirates over securing alternatives to Russian energy sources.

Brent crude oil, the international benchmark, broke back above $120 a barrel last week amid concerns over tight supply. It has climbed more than 50pc this year.

On Sunday, Saudi Arabia, the world’s top oil exporter, said it would increase prices for Asia, its biggest market, as demand returns in the wake of lockdowns.

Aramco, the state oil company, said it would raise the price of Arab Light grade crude for Asian customers by $2.10 a barrel.

Last Thursday, Opec+, the oil cartel led by Riyadh and Moscow, said it would increase output, adding 648,000 barrels per day to the global market.

The pressures have already spilled on to British consumers, with petrol prices at the pump rising 10p in May, the second-largest monthly increase on record.

The average price of filling a family car with diesel broke through £100 for the first time as both petrol and diesel pushed to record highs.