Oil prices saw an uptick in early Asian trading on Wednesday, driven by concerns over potential supply disruptions following U.S. President Donald Trump’s new tariff threats on nations importing oil and gas from Venezuela. A sharper-than-expected drop in U.S. crude inventories also contributed to the price increase.
By 1214 GMT, Brent crude futures had risen by 25 cents, or 0.3%, to reach $73.27 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures climbed 28 cents, or 0.4%, to trade at $69.28 per barrel.
Trump’s recent executive order, signed on Monday, allows for the imposition of a 25% blanket tariff on oil and gas imports from any country purchasing Venezuelan crude. This action falls under the 1977 International Emergency Economic Powers Act and is expected to impact key buyers of Venezuelan oil, particularly China, which is already facing trade restrictions from the U.S.
Additionally, the U.S. administration has extended the deadline for Chevron to wind down its operations in Venezuela until May 27. Analysts at ANZ estimate that if Chevron ceases operations, Venezuela’s oil production could decrease by approximately 200,000 barrels per day, further tightening global supplies.
Adding to the supply concerns, industry reports revealed that U.S. crude stockpiles fell by 4.6 million barrels for the week ending March 21, significantly surpassing analysts’ expectations of a 1 million-barrel decline. These figures were reported by market sources citing data from the American Petroleum Institute (API). Official inventory data from the U.S. Energy Information Administration (EIA) is expected to be released later on Wednesday.
However, oil price gains were somewhat restrained after the U.S. brokered agreements with Ukraine and Russia to ease maritime and energy-related conflicts. As part of the deal, Washington has agreed to push for the lifting of some sanctions against Moscow. Both Kyiv and Moscow acknowledged the agreement but expressed concerns about its enforcement and whether the opposing side would fully comply.
Despite geopolitical uncertainties, the recent developments surrounding Venezuela and U.S. inventory data suggest that oil prices may continue to see volatility in the near future.