Brent gains as Washington threatens to impose tariffs on Venezuelan oil buyers

The front-month ICE Brent contract has gained $1.31/bbl on the day, to trade at $73.30/bbl at 09.00 GMT.

PHOTO: Black oil barrels. Getty Images

Upward pressure:

Brent’s price gained over $1/bbl after US President Donald Trump threatened to impose 25% tariffs on imports from countries buying Venezuelan oil and gas.

The news comes amid growing tensions between Washington and the Nicolas Maduro-led Venezuelan government, with the former accusing the Latin American country of fueling illegal immigration and criminal gang activities in the US.  

“Oil got an additional boost after the US announced secondary tariffs on buyers of Venezuelan oil,” two analysts from ING Bank noted.

China, India, Spain, Italy and Cuba are among the largest consumers of Venezuelan oil, Reuters reports.

“The levies would impact major economies from China and India and Western Europe,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked. “It may also complicate business for US Gulf Coast refiners, that rely heavily on Venezuela’s heavy crude to feed production lines,” he added.

Downward pressure:

Brent’s price gains were partially capped after the US treasury department extended oil company Chevron’s deadline to cease operations in Venezuela until 27 May.

Despite the existing sanctions, Chevron has held a license allowing it to operate in the country and export crude oil to the US since 2022.

“The withdrawal of Chevron’s licence to operate could reduce production in the country by about 200kb/d [200,000 b/d],” Hynes added.

By Aparupa Mazumder

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