Oil prices surge on Trump’s sanctions in Venezuela

Oil prices gained strength on Thursday and WTI price rose from $68.7 to $70.4 per barrel. If oil prices retreat, they may encounter support near $67.0 per barrel, while resistance may be found near $73.1 per barrel.

Supply concerns are boosting oil prices. US President Donald Trump announced on Thursday that Chevron’s operating license in Venezuela would be revoked. Chevron exports approximately 240K barrels per day from Venezuela, which constitutes over a quarter of the country’s oil output.
In addition, the US government imposed new sanctions on Iranian oil exports on Monday, driving oil prices up. At the same time, Iraq has reaffirmed its commitment to limit oil production according to OPEC regulations.

US President Donald Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. Trump has threatened that he will announce reciprocal tariffs on many countries, which would raise US import taxes to match those imposed by the country’s other trading partners. If Trump goes through with these heavy tariffs, global inflation is likely to rise and the economic outlook will worsen, putting pressure on oil prices.

Trump’s tariff plans change rapidly, causing confusion and volatility in markets. Trump stated earlier this week that he intends to impose tariffs on Canada and Mexico. Trump’s plans of imposing 25% tariffs on Canada and Mexico had been postponed for a month after both countries agreed to tighten border activities. On Tuesday, however, Trump stated that he intends to go ahead with imposing tariffs on his neighboring countries on March 4. Trump backpedaled again on Thursday, pushing back the timeline of imposing tariffs to Canada and Mexico on April 2. 

US President Donald Trump and Russian President Vladimir Putin met in Riyadh, in Saudi Arabia last week, but the meeting was fruitless, driving oil prices up. Trump has initiated peace talks between the two countries, without making significant progress so far, however. Hopes that Trump may eventually broker a peace deal that will end a conflict that has lasted for three years are putting pressure on oil prices.

Oil prices are kept in check by high central banks’ interest rates. The US Federal Reserve held interest rates steady at its January meeting after delivering three consecutive rate cuts in 2024. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%.

TRADE WTI

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: