Oil prices rose on Wednesday as concerns over tighter global supply grew following the U.S. threat of tariffs on nations purchasing Venezuelan crude and a larger-than-expected decline in U.S. crude inventories.
Brent crude futures climbed 49 cents to $73.51 per barrel, while U.S. West Texas Intermediate crude increased by 48 cents to $69.48. Both benchmarks reached their highest levels in three weeks during the previous session.
The trade of Venezuelan oil to China came to a halt on Tuesday after U.S. President Donald Trump signed an order authorizing 25% tariffs on imports from any country buying Venezuelan crude. This move added fresh uncertainty to global oil flows just days after Washington imposed sanctions on China’s imports of Iranian oil.
China, Venezuela’s top oil buyer, is now waiting for further clarification on how the tariffs will be enforced.
Last week, Washington also expanded sanctions on Iran’s oil sales, targeting independent Chinese refiners and vessels involved in transporting Iranian crude. These measures have contributed to a tightening in the global oil market as traders assess the impact of shifting supply routes.
Meanwhile, data from the American Petroleum Institute showed U.S. crude inventories dropped by 4.6 million barrels last week, exceeding expectations of a 1-million-barrel decline and signaling strong demand. The official U.S. government report on crude stockpiles is expected later on Wednesday.
Oil price gains were partially capped by an agreement between the U.S., Ukraine, and Russia to pause attacks at sea and on energy infrastructure, with Washington pushing to lift certain sanctions on Moscow. Both Kyiv and Moscow have stated they will rely on Washington to enforce the terms of the agreement, while expressing skepticism about the other side’s commitment.
Despite the price increase, concerns remain over potential economic slowdowns resulting from Trump’s tariffs, which could limit further gains in the oil market.
