Oil Prices Surge After Trump's Blockade on Venezuela
Oil prices rise after Trump announces blockade on oil tankers to Venezuela.
SUMMARY
Oil prices in Asia rose after Trump announced a blockade on oil tankers to Venezuela, causing disruption to most of the country's exports and increasing West Texas Intermediate and Brent crude prices. The blockade raised concerns about supply disruptions despite unclear implementation details, with some shipments continuing under previous licenses. Venezuelan oil represents a small share of global supplies, and the blockade's impact is limited due to weak demand and abundant oil in Asia.
KEY HIGHLIGHTS
- Trump imposes blockade on oil tankers to and from Venezuela.
- West Texas Intermediate and Brent crude prices rise in Asian markets.
- Most Venezuelan oil exports disrupted due to the blockade.
- Concerns over global oil supply disruptions.
- Venezuelan oil accounts for about 1% of global supplies.
CORE SUBJECT
Oil price increase following blockade on Venezuelan oil tankers
Oil prices rose by about one dollar in Asian trading on Thursday after US President Donald Trump announced a blockade on the entry and exit of oil tankers to and from Venezuela, leading to continued disruption of most of the country's exports.
The price of US West Texas Intermediate crude increased by 98 cents, or 1.7 percent, to $56.89 per barrel after initially rising by more than a full dollar. Brent crude rose by 92 cents, or 1.54 percent, to $60.60 per barrel.
Trump issued an order on Tuesday to impose a blockade on all sanctioned oil tankers entering and leaving Venezuela, describing President Nicolás Maduro's administration as a foreign terrorist organization. It is not yet clear how this decision will be implemented.
Sources and customs data showed that most Venezuelan exports remained halted on Wednesday due to the blockade, despite the Venezuelan state oil company resuming loading of crude oil and fuel shipments after a halt caused by a cyberattack. Chevron's vessels continued sailing to the United States under a previous US government license.
Tony Sycamore, a market analyst at IG, said in a note, "Although the details of the implementation remain unclear, the unexpected escalation of US pressure on the Maduro regime has raised concerns about supply disruptions."
Last week, the United States Coast Guard used its authority to seize the giant oil tanker Skipper near Venezuela in the first US seizure of an oil shipment coming from Venezuela.
News of the blockade pushed oil prices up by more than one percent during Wednesday's session, recovering from their lowest levels in five years reached amid progress in Ukrainian peace talks that could pave the way for easing sanctions on Russia.
Venezuelan crude accounts for about one percent of global supplies and most of it is exported to China. However, market sources indicate that weak demand and the abundance of crude oil available on floating storage units in Asia reduce the impact of the latest developments on the world's largest oil importer.
KEYWORDS
MENTIONED ENTITIES 7
Donald Trump
👤 Person_MaleUS President who announced the blockade on oil tankers to Venezuela
Nicolás Maduro
👤 Person_MalePresident of Venezuela whose administration was described as a foreign terrorist organization
Chevron
🏛️ OrganizationOil company whose vessels continued sailing to the US under a US license
IG
🏛️ OrganizationMarket analysis company where Tony Sycamore works
Venezuela
📍 Location_CountryCountry subjected to the US blockade on oil tankers
United States
📍 Location_CountryCountry that imposed the blockade and seized an oil tanker near Venezuela
China
📍 Location_CountryLargest importer of Venezuelan oil