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—
Price
crude oil
The world strengthened almost US$ 1 in trading Thursday (18/12), after the President of the United States (US)
Donald Trump
announced a blockade of incoming and outgoing tankers
Venezuela
.
Trump’s policy has raised concerns about supply disruptions, especially now that most of Venezuela’s oil exports are still being held back.
Quote
Reuters,
The price of US West Texas Intermediate (WTI) crude oil rose 98 cents or 1.7 percent to US$56.89 per barrel, after strengthening by more than US$1.Meanwhile, Brent crude oil rose 92 cents or 1.54 percent to US$60.60 per barrel.
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IG market analyst Tony Sycamore assesses that the escalation of US pressure on Venezuela is the main trigger for the increase in oil prices.
“While enforcement details remain unclear, the unexpected escalation of US pressure on the Maduro regime has sparked fears of supply disruptions and prompted the closing of short positions in previously saturated markets,” he said.
Yesterday Trump ordered a blockade of all oil tankers entering and leaving Venezuela and which are on the sanctions list.
Trump also accused Venezuelan President Nicolas Maduro’s government of being a foreign terrorist organization, although the mechanism for enforcing the blockade has not been explained in detail.
Market sources and customs data showed most of Venezuela’s oil exports remained stuck on Wednesday due to the policy.This comes even though state oil company PDVSA has resumed loading crude oil and fuel cargoes, having previously halted operations due to cyber attacks.
On the other hand, the tanker chartered by Chevron is reportedly still leaving for the US.The shipment was made based on a special permit previously granted by the Trump administration.
Last week, the US used the Coast Guard to seize the giant tanker Skipper near Venezuelan waters.The action marked the first seizure of Venezuelan oil cargo by the US.
News of this blockade pushed oil prices up more than 1 percent in the trading session Wednesday (17/12).The increase was also a rebound from a five-year low previously triggered by progress in Ukraine peace talks, which opened the door to easing sanctions on Russia.
Venezuelan crude accounts for about 1 percent of global supply.Most of the country’s exports go to China.
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