Venezuela Wildcard: Policy Moves and Price Implications
Fresh U.S. sanctions against Russia sent crude prices surging over 4%, though the rally quickly lost momentum as traders questioned Trump’s resolve and Kuwait’s oil minister poured cold water on the move. The sanctions carry more symbolic weight than real disruption, with Russia’s vast “shadow fleet” still moving barrels under the radar. Yet the announcement reshuffles global supply lines: India and China—Russia’s biggest buyers—are being forced to pivot toward Middle Eastern producers. OPEC, already ramping up output over the past year, is well positioned to fill the gap and reclaim market share.
Politically, Trump’s sanctions appear less an all-out strike and more a tactical lever in his broader negotiations with China. He’s likely to ease pressure once the headlines have served their purpose, avoiding an oil price spike that could reignite inflation and undermine U.S. economic goals. This is power politics by design—using the oil market as a diplomatic weapon while keeping the inflation genie in the bottle.
Adding to that, reports that Washington is preparing for potential intervention in Venezuela could prove net-bearish—a reminder that behind the political theater lies the world’s largest untapped oil reserve, waiting to re-enter the market.
Positioning Check: Specs Short into the Rip
We continue to be shut out of CFTC data. Thanks to Commodity Context using ICE EU data, we can see that Specs are now at all-time high short positioning since 2011. They are short into this rip. If we look at the technicals in the trade section below, I can see why.
