Oil fell from a two-week high as traders tracked tensions in the Middle East and the US eased some crude sanctions against Venezuela.

West Texas Intermediate dropped below $88 a barrel after rallying 1.9% on Wednesday to close at the highest since Oct. 3. Following a brief midweek visit to Israel, US President Joe Biden plans an Oval Office address on the crisis on Thursday amid a drive to prevent the conflict from escalating.

Outside the Middle East, the US suspended some sanctions on Venezuelan oil and other commodities and assets in response to the signing of an electoral roadmap agreement between the government of President Nicolas Maduro and the opposition. The country’s oil exports to the US were halted in 2019.

Oil has been volatile since the Oct. 7 attack on Israel by Hamas, designated a terrorist organization by the US and European Union. There are concerns that an expected ground offensive by Israel into Gaza could prompt a more aggressive response from Iranian-backed Hezbollah in southern Lebanon and, potentially, Tehran itself. The Middle East supplies about a third of the world’s crude.

“The window for a diplomatic off-ramp to avert a wider war in the Middle East appears to be closing,” RBC Capital Markets LLC analysts including Helima Croft said in a note. “A regional crisis appears the most likely outcome, especially with Israel still seemingly committed to a ground offensive to crush Hamas.”

Iran has appealed for an oil embargo against Israel as it ramps up pressure against Hamas in Gaza. Citigroup Inc. said Israel’s main suppliers, including Kazakhstan and Azerbaijan, were unlikely to follow such a call.

US data, meanwhile, pointed to very tight physical markets. Holdings of crude at Cushing, Oklahoma — the delivery point for WTI — dropped by more than 700,000 barrels last week to hit the lowest level since 2014.

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