Oil prices were up nearly a dollar in Asian trade on Thursday after President Donald Trump announced a blockade on tankers entering and leaving Venezuela and most exports from the country remained on hold. US West Texas Intermediate (WTI) crude was up 98 cents, or 1.7 per cent, at $56.89 per barrel at 0120 GMT, after initially rising more than a dollar.
Brent crude rose 92 cents or 1.54 per cent to $60.60 per barrel. Trump on Tuesday had ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, calling President Nicolas Maduro’s administration a foreign terrorist organization, although it was unclear how it would be enforced.
Sources and customs data indicated most Venezuelan exports remained on hold on Wednesday due to the blockade, even though Venezuelan state oil company PDVSA restarted loading crude and fuel cargoes after it had had to suspend operations because of a cyberattack. Chevron vessels were continuing to depart for the US under a previous authorisation from the US government.
“While enforcement details remain unclear, the unexpected escalation in US pressure against the Maduro regime has sparked supply disruption concerns and triggered short covering in an oversold market,” IG market analyst Tony Sycamore said in a note.
The US last week used its Coast Guard to seize the supertanker Skipper near Venezuela, the first US seizure of an oil cargo from Venezuela.
News of the blockade prompted oil prices to rise by more than 1 per cent in the Wednesday session, rebounding from five-year lows driven by progress on Ukraine peace talks that seemed to point the way to a potential easing of Russian sanctions.
Venezuelan crude makes up around 1 per cent of global supplies. It sends most of that to China, but market sources say weak demand and a surfeit of crude in floating storage in Asia are keeping the market impact on the world’s biggest importer limited.
In the UK, oil and gas major BP said on Thursday it had appointed Meg O’Neill, the head of Australia’s Woodside Energy , as its CEO from April 1, a sign the company is pushing forward with a strategy shift after it slashed renewable initiatives to pivot back to oil and gas earlier this year.
