Trump Blockades Venezuelan Oil, Oil Prices Soar!
Global oil prices rose more than 1% on Wednesday after US President Donald Trump ordered a complete blockade of all sanctioned oil tankers entering and leaving Venezuela. This move escalated geopolitical tensions amid global concerns about fragile oil demand.
Brent crude rose 79 cents, or 1.3%, to $59.71 per barrel, while West Texas Intermediate (WTI) crude rose 77 cents, or 1.4%, to $56.04 per barrel. This rise came after oil prices had previously hit a five-year low on news of progress in Russia-Ukraine peace talks.
The blockade on Venezuela is estimated to affect around 0.4-0.5 million barrels of oil per day. A US oil trader said this could push prices up by around $1-2 per barrel, despite Venezuelan exports' relatively small contribution to global supply.
In Asia, some of the price increases were also driven by buying in oil futures contracts after WTI and Brent crude fell below $60 per barrel the previous day. However, traders warn that this increase is likely temporary and could be exploited by some investors to build selling positions.
Trump's policy comes one week after the US seized a sanctioned tanker off the coast of Venezuela. It remains unclear how many vessels will be affected and how the blockade will be implemented, including the possible involvement of the Coast Guard.
Analysts estimate that the oil market remains well supplied at present. However, if the blockade persists for a longer period, the price of Venezuelan heavy oil could continue to rise. On the other hand, extreme price spikes in the short term are considered unlikely without broader retaliatory action in the Americas. (asd)
Source: Newsmaker.id
