Brent crude climbs above $73 amid renewed tensions over Venezuela oil

Los precios del petróleo continuaron subiendo el martes después de que el presidente estadounidense, Donald Trump, anunciara el lunes que Estados Unidos impondrá aranceles del 25% a los países que compren petróleo y gas a Venezuela.

Trump’s announcement of secondary sanctions targeting countries that import oil and gas from Venezuela is likely to bolster Brent crude oil prices. 

US sanctions and oil prices

By restricting Venezuela’s ability to export oil and gas, the sanctions could lead to a decrease in global supply, thereby driving up prices. 

The secondary sanctions are also aimed at discouraging countries from doing business with Venezuela, further isolating the country economically and politically. 

The potential impact of these sanctions on the global oil market is significant, and traders and analysts will be closely monitoring developments in the coming weeks and months.

Brent crude oil prices settled above $73 per barrel, the highest since late February, after the news broke on Monday.

ING Group’s analysts said in a note:

Oil, along with broader risk assets, also benefited from suggestions the Trump administration may take a more targeted approach with reciprocal tariffs.

At the time of writing, the price of West Texas Intermediate crude oil on the New York Mercantile Exchange was at $69.47 per barrel, up 0.5%, while Brent on the Intercontinental Exchange was up 0.4% at $72.69 a barrel. 

Venezuela raised production in recent years

In recent years, Venezuela has experienced a resurgence in its oil production and exports, primarily attributed to the Biden administration’s decision to ease sanctions that had previously crippled the nation’s oil industry. 

This easing of sanctions included a significant waiver granted to Chevron, allowing the American oil giant to resume operations within Venezuela. 

The resumption of Chevron’s activities, along with other policy adjustments, has facilitated a gradual increase in Venezuelan oil output, enabling the country to re-enter the global oil market and bolster its export capabilities. 

The country currently exports approximately 750,000 barrels per day of oil.

ING analysts said:

As such, this move could mean a fairly sizeable tightening in the global oil balance.

Disruptions

China, the US, and India are the primary importers of Venezuelan crude oil.

Sin embargo, esta situación podría cambiar, ya que la exención de sanciones de Chevron, que le permite operar en Venezuela, expirará el 27 de mayo.

Trump’s new policy relieves some pressure on Chevron to quickly exit Venezuela.

Trump initiated the original wind-down due to his accusations that Venezuelan President Nicolas Maduro was not advancing electoral reforms or facilitating migrant returns.

Esta expiración podría provocar una disminución de las exportaciones de petróleo venezolano a Estados Unidos.

This date also marks the potential introduction of broader reciprocal levies, which may be put into effect on the same day, further impacting trade and economic relations between the involved parties.

“This should be supportive for heavier crude oil grades, of which Venezuela is a key exporter,” ING further said.