On Wednesday, December 17, oil prices rose after US President Donald Trump announced the introduction of a "full and comprehensive" blockade for all sanctioned tankers entering and leaving Venezuela. This was reported by Reuters, according to UNN.
Details
It is noted that Brent quotes rose by 0.9% - to $59.46 per barrel, and American WTI rose by 1% - to $55.82. The market reacted to the increased geopolitical tension and fears of a possible reduction in supply volumes.
Earlier, oil prices remained near five-year lows amid progress in peace talks between Russia and Ukraine, which could lead to a softening of sanctions against Moscow and an increase in market supply. However, Trump's announcement changed investor sentiment.
According to traders' estimates, the blockade could potentially remove 0.4-0.5 million barrels per day from the market, which could further push prices up by $1-2 per barrel. At the same time, experts warn that real losses may be smaller due to the reorientation of supplies and the replacement of Venezuelan oil with other grades.
How the blockade will be implemented is still unclear. Reuters reports that the US may involve the Coast Guard, as it already did during the recent detention of a sanctioned tanker off the coast of Venezuela. In addition, Washington has recently increased its military presence in the region.
The US steps are part of a broader campaign of pressure on the government of Venezuelan President Nicolas Maduro, whom Trump, among others, accuses of facilitating drug trafficking to the United States.
According to the news agency, after the tanker's confiscation, Venezuelan oil exports have already significantly decreased.
Recall
On December 16, US President Donald Trump ordered a complete blockade of all sanctioned oil tankers entering or leaving Venezuelan territorial waters. He accused Venezuela of stealing American assets and declared its government a "foreign terrorist organization."