Oil Prices Rise as U.S Revokes Venezuela Agreement
Oil prices rose as US President Donald Trump revoked an exemption on oil sales to Venezuela, with data showing a decline in US crude inventories and ongoing concerns about American tariff policies.
Prices continued to trend lower yesterday amid uncertainty over the outlook for tariffs, a dynamic overshadowing sanction risks. After imposing additional sanctions on Iran’s oil industry, the Trump administration is now eyeing Venezuela, ending Chevron’s licence to operate in the South American nation.
Previously, Chevron was allowed to operate there and, despite sanctions, export crude to the US. This development has boosted differentials for medium-sour crude grades, such as Mars Blend, ING said in a note.
Its differential jumped by more than US$1 per barrel to US$1.71/bbl. US imports of Venezuelan crude oil have averaged almost 270,0000 b/d so far this year.
Brent crude increased by 0.1%, trading at $72.30 per barrel, up from $72.20 at the close of the previous session. The US benchmark West Texas Intermediate (WTI) increased by 0.1%, reaching $68.74 per barrel, compared to its prior session close of $68.67.
Trump’s announcement on Wednesday marked a reversal of previous concessions granted to Venezuela under the Biden administration, which had eased sanctions on Venezuelan oil exports.
‘We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro, of Venezuela, on the oil transaction agreement, dated November 26, 2022, and also having to do with electoral conditions within Venezuela, which have not been met by the Maduro regime,’ Trump said on Truth Social.
‘I am therefore ordering that the ineffective and unmet Biden ‘Concession Agreement’ be terminated as of the March 1st option to renew.’ he added.
In 2022, the former administration had eased some oil sanctions on Venezuela, marking the first significant crack in a years-long US embargo. The US Treasury Department issued Venezuela General License 41, which authorizes Chevron — one of the leading private oil companies in Venezuela — to ‘resume limited natural resource extraction operations in Venezuela.’
Trump’s move propelled oil prices higher as markets feared tight global supplies. Meanwhile, the US Energy Information Administration (EIA) reported a decline in crude inventories, which further fueled price increases, suggesting stronger domestic demand.
According to the EIA, US commercial crude stocks fell by 2.3 million barrels to 430.2 million barrels last week—counter to market expectations of a 2.3 million barrel increase — highlighting a robust uptick in demand.
Further, Trump’s comments on imposing new tariffs on the EU fueled concerns over supply disruptions. He announced that the US would soon impose a 25% tariff on European goods, including automobiles. #Oil Prices Rise as U.S Revokes Venezuela Agreement CBN Rejects N1.6trn from Investors, Cuts Treasury Bills Rates
