Oil Prices Rise on Venezuela Tariff Threats and U.S. Inventory Drop

Oil prices edged higher in early Asian trading on Wednesday amid concerns over tighter global supply. The move came after U.S. President Donald Trump threatened tariffs on countries importing oil and gas from Venezuela, a major crude exporter. Brent crude futures rose 25 cents (0.3%) to $73.27 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 28 cents (0.4%) to $69.28.

Trump’s executive order, signed Monday, allows the imposition of 25% tariffs under the 1977 International Emergency Economic Powers Act on imports from nations purchasing Venezuelan crude and liquid fuels. China, Venezuela’s largest oil buyer and a current target of U.S. tariffs, is directly impacted.

Further pressuring Venezuelan output, the U.S. extended Chevron’s license to operate in the country until May 27. Analysts at ANZ noted that losing Chevron’s presence could slash Venezuela’s oil production by 200,000 barrels per day.

Adding to bullish sentiment, the American Petroleum Institute reported a 4.6 million barrel drop in U.S. crude inventories for the week ending March 21, far exceeding analysts’ expectations of a 1 million barrel decline. Official data from the U.S. Energy Information Administration is expected later Wednesday.

However, gains were capped after the U.S. reached temporary agreements with Ukraine and Russia to pause maritime and energy-related attacks. Washington also committed to pushing for the easing of some sanctions on Moscow. Despite the deal, both Kyiv and Moscow voiced doubts about each other’s compliance.

Investors remain focused on geopolitical tensions and supply risks, with global energy markets reacting strongly to U.S. foreign policy developments and unexpected shifts in crude stockpiles.