IMF says oil prices steady so far despite Venezuela and Iran tensions

The International Monetary Fund (IMF) said on Thursday it is closely tracking global energy markets amid rising geopolitical tensions involving Venezuela and Iran, but stressed that oil prices have yet to experience any major disruption.

Speaking at the IMF’s regular press briefing, Julie Kozack, director of the Fund’s Communications Department, said the institution was watching developments carefully, particularly movements in oil prices. While risks remain elevated, she noted that markets have not, so far, shown “very significant impacts”.

“We pay close attention to what happens in global energy markets and oil prices in particular,” Kozack said, adding that the IMF would continue to look for signs of change as the situation evolves.

Her comments came as she outlined the IMF’s latest assessment of Venezuela’s economy and the conditions under which the Fund could potentially re-engage with the country. Since 2019, the IMF’s formal dealings with Caracas have been paused due to government recognition issues, with any decision to resume engagement guided by the views of the international community as reflected in the Fund’s voting membership.

Kozack said that since late 2024, economic imbalances and vulnerabilities in Venezuela have re-emerged, largely due to falling oil revenues, a widening fiscal deficit and a shortage of US dollar liquidity. These pressures have led to increased monetary financing of the deficit, accelerating inflation and weakening the currency.

Inflation in Venezuela is estimated to be in the triple digits, while rapid currency depreciation is under way, she said. Public debt is estimated at around 180 per cent of gross domestic product, even before accounting for potential legal judgments or arbitration claims, and much of that debt remains in default.

She also confirmed that Venezuela’s holdings of Special Drawing Rights at the IMF are equivalent to about $4.9 billion, but stressed that the country would only be able to access them if the Fund resumes engagement.

Describing the broader context, Kozack said Venezuela continues to face a severe and prolonged economic and humanitarian crisis. Since 2014, around eight million people — roughly a quarter of the population — have left the country. Socioeconomic conditions remain extremely difficult, marked by high poverty and inequality and widespread shortages of basic services.

Despite what she described as “very significant information gaps”, Kozack said the IMF is continuing to monitor developments closely, underscoring that Venezuela’s overall situation remains deeply fragile and humanitarian needs remain substantial.

With IANS inputs