Oil Rises Amid Anticipation of U.S. Actions on Venezuelan Oil

SadaNews - Oil prices have increased slightly as traders anticipate further U.S. actions aimed at tightening control over the Venezuelan oil sector, including a plan to manage future crude sales indefinitely and seizing two additional sanctioned tankers.

Brent crude traded above $60 a barrel after losing 3% during the previous two sessions, while West Texas Intermediate crude was trading near $56.

U.S. Energy Secretary Chris Wright stated that the United States would initially begin by offering stored crude before transitioning to selling Venezuelan supplies, adding that the Energy Department has already begun marketing the oil.

The Venezuelan National Oil Company said it is in talks with Washington regarding crude sales under a framework similar to the arrangement currently in place with Chevron, the only major U.S. oil company still operating in the country.

Rearranging Venezuelan Oil Flows

U.S. President Donald Trump is pushing to involve American companies in rebuilding Venezuela's energy sector, which has severely deteriorated after years of neglect. Executives in the energy sector are set to meet on Friday. The U.S. administration has begun selectively rolling back some sanctions imposed on the oil sector in the country within this context.

Citgo Petroleum, the U.S. refinery indirectly owned by Venezuela, is considering resuming oil purchases for the first time since sanctions cut off supplies in 2019, and the Trafigura group has expressed interest in that. Chevron is also in talks with the United States to extend its operating license in Venezuela.

Trump mentioned on Tuesday that Venezuela would concede up to 50 million barrels of oil to the United States, worth over two billion dollars, announcing that the shipments would be sold with the proceeds to benefit both countries. According to a source familiar with the matter, the sales proceeds will be deposited in accounts with the U.S. Department of the Treasury.

China the Biggest Loser

Vandana Hari, founder of Vanda Insights, a market analysis firm based in Singapore, said in an interview with Bloomberg Television that "redirecting and rearranging Venezuelan oil flows will likely be a key focus in the medium term." She added, "One of the most adversely affected parties will certainly be China."

The Asian nation was the main buyer of Venezuelan oil, which was sold at significant discounts following American sanctions. Beijing criticized reports that the Trump administration is urging Caracas to sever its alliances with U.S. adversaries, describing the move as "bullying behavior," according to ABC News.

Global benchmark oil contracts started the new year with weak performance following the largest annual drop since 2020. The potential increase in Venezuelan exports has already led to a decline in Canadian crude prices, as it would add more barrels to a market suffering from oversupply, while the OPEC+ alliance and producers outside it continue to increase production.

Despite this, the naval blockade imposed on Venezuela continues, with the Trump administration maintaining its pressure on the country's government.

The United States seized two additional sanctioned tankers, including the "Bella 1," which had tried to evade detention. The ship had been registered under a Russian flag in an attempt to protect itself, but was intercepted south of Iceland.