Brent Jumps to $73 Per Barrel as Trump Threatens Buyers of Venezuela Crude

The price of Brent crude grew by 84 cents or 1.2 per cent to $73 a barrel and the US West Texas Intermediate (WTI) crude appreciated by 83 cents or 1.2 per cent to $69.11 per barrel.

President Trump’s new policy relieves some pressure on oil major Chevron to quickly exit Venezuela after the US Treasury Department on March 4 gave it 30 days to wind down operations.

Now, it has given the oil producer until May 27 to wind down its oil operations and exports from Venezuela.

Mr Trump had issued the initial wind-down after he accused Venezuelan President, Mr Nicolas Maduro, of not making progress on electoral reforms and migrant returns.

The two moves taken together alleviate some pressure on Chevron while putting more pressure on other consumers of Venezuelan oil.

However, market analysts noted that it is uncertain how the Trump administration will enforce the tariff.

Punishing foreign buyers of Venezuela’s oil with tariffs could hit its crude exports, forcing price discounts, and have a similar effect to secondary sanctions on the country that President Trump imposed during his first term in 2020.

The US last Thursday issued new sanctions intended to hit Iranian oil exports, including targeting Chinese independent refineries processing the country’s crude.

Also, the American President is mulling fresh tariffs on automobiles, aluminum and pharmaceuticals.

He has also urged the US Federal Reserve to lower interest rates after the central bank last week kept them unchanged.

Lower rates decrease the costs of borrowing, and can boost economic activity and demand for oil.

Meanwhile, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will likely proceed with a planned May oil output hike.

This capped priced just as talks continued to end the war in Ukraine, which could increase supply of Russian crude to global markets.

Officials from the US and Russia were in Saudi Arabia on Monday for talks over a broad ceasefire in Ukraine, with the US also targeting a separate Black Sea maritime ceasefire deal while a wider agreement is discussed.