Trump's Venezuela Sanctions Increased Oil Prices

Trump's Sanctions on Venezuela Lead to Increase in Oil Markets

U.S. President Donald Trump’s order to expand the scope of sanctions on Venezuela, implementing a full blockade on all oil ships in the region, has resulted in nearly a 2% rise in global crude oil prices. This development has brought rising geopolitical concerns back to the forefront, overshadowing the recent negative expectations regarding fuel demand among the public.

Stern Sanctions on Venezuela

The U.S. administration has intensified sanctions against Venezuela by designating its leadership as a "foreign terrorist organization." During this process, the U.S. Coast Guard has seized a sanctioned ship off the coast of Venezuela. Additionally, uncertainties regarding the technical details of the blockade and the level of participation of the Coast Guard in operations continue as the naval presence is increased.

Possible Effects on Supply Chain

As the effects on the supply chain remain unclear, it appears that Chevron is still importing crude oil from Venezuela under a special permit obtained from the U.S. Treasury Department. Venezuela currently accounts for about 1% of global oil supply; a significant portion of this process is directed towards China. China's share in total oil imports is recorded at around 4%.

Recent Stock Data Supports Prices

Stock data from the U.S. is another factor supporting oil prices. According to preliminary data from the American Petroleum Institute, U.S. oil stocks fell by 9.3 million barrels last week. This figure significantly exceeds analysts' expectations of a 1.1 million barrel decrease. Investors are awaiting clarification on the scale of this reduction in the official report from the Energy Information Administration (EIA).