Global oil prices slipped on Wednesday as markets reacted to signals of a potential supply surge after US President Donald Trump said Venezuela would hand over up to 50 million barrels of crude oil to the United States. The development raised fresh concerns about oversupply at a time when demand growth remains fragile, pushing Brent crude below the $60-per-barrel mark.
According to oilprice.com, Washington and Venezuela’s interim leadership have reached an agreement that would see crude valued at nearly $2 billion exported to the US at market rates. Trump said between 30 million and 50 million barrels of “high-quality” oil would be delivered, a move that traders believe could significantly boost supplies to US Gulf Coast refineries.
Reuters noted that the deal could also reshape global trade flows by tightening the squeeze on Venezuela’s illicit oil shipments to China. Venezuela’s state oil firm, PDVSA, has struggled to ship cargoes to Asia for almost a week as the US naval “oil quarantine” continues. Chevron remains the only Western oil company authorised by the US Treasury to operate in Venezuela, shipping crude directly to the US, while Chinese buyers have reduced intake as price discounts narrowed.
Market pressure has also been intensified by geopolitical developments in Venezuela. Following the capture of President Nicolás Maduro by US forces late last year, Vice President Delcy Rodríguez was sworn in as Acting President. Trump has since insisted that the new interim government grant the US and private companies full access to Venezuela’s oil sector, with some of the crude expected to come from floating storage built up since the naval blockade began in December.
By Wednesday evening, Brent crude was trading at $59.99, while West Texas Intermediate (WTI) fell to $56.10. Analysts warn that prices could slide further in the coming weeks if Venezuelan barrels begin flowing steadily into the US market, adding to already cautious sentiment across global energy markets.
source: Punch