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Oil prices up 2% after Trump blockade order
The markets are closely watching how such a blockade would actually be imposed.
The price of US crude jumped more than 2% after Trump’s announcement – Brent was up $1.41, or 2.4%, at $60.33 a barrel at 10:18 GMT, while West Texas Intermediate crude rose $1.42, or 2.6%, to $56.69 a barrel.
Oil prices have been at near five-year lows due to progress on Ukraine peace talks however the risk to the Venezuelan supply is now driving it up again.
“Venezuelan oil production accounts for around 1% of global output, but supplies are concentrated among a small group of buyers, mainly Chinese teapot refiners, the U.S., and Cuba,” Muyu Xu, senior oil analyst at Kpler told AP.
Venezuela condemns “warmongering threats”
Trump in his Truth Social message didn’t have any detail on how a blockade on sanctioned oil tankers might be enforced, or if he would direct the Coast Guard to seize vessels like he did last week.
His administration has moved thousands of troops and nearly a dozen warships – including the world’s largest aircraft carrier – to the sea north of Venezuela in the past couple of weeks.
It’s clear the move targeting oil, Venezuela’s main source of income, is aimed at further squeezing Nicolas Maduro’s government.
Venezuela affirmed its sovereignty over all natural resources and its right to free navigation and trade in the Caribbean Sea despite “warmongering threats,” the government said in a statement on Tuesday. They condemned Trump’s “irrational military blockade” order as a “grotesque threat” aimed at “stealing” the country’s wealth.
Good morning and welcome to our US politics blog, I’m Frances Mao taking you through the next few hours.
The immediate focus is on Venezuela after President Trump on Tuesday night ordered a “total and complete” blockade of sanctioned oil tankers to and from the country.
Venezuela is home to the world’s largest identified oil reserves and its economy is reliant on oil. It’s accused Washington of trying to steal its resources through such “warmongering threats”.
The move comes after US officials seized a tanker off the coast last week, just the latest escalation in weeks of US naval aggression in the Caribbean.
Trump last night wrote that Venezuela was now “completely surrounded by the largest Armada ever assembled in the History of South America”. He added it would “only get bigger” and “be like nothing they have ever seen before”.
