Oil Falls as US Pressures Venezuela Over Crude Supplies

AFP/APP

London: Oil prices tumbled further Wednesday after US President Donald Trump announced that Venezuela would hand over millions of barrels of crude to the United States, adding volatility to markets already rattled by geopolitical and supply concerns.

Trump wrote on his Truth Social platform that the “Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America.”

He added that the oil would be sold at market price, with revenues controlled by him “to ensure it is used to benefit the people of Venezuela and the United States.”

US Energy Secretary Chris Wright confirmed that Washington would oversee sales of Venezuelan oil “indefinitely.” Analysts said the move reduces the risk of output cuts in Caracas due to storage limitations, easing short-term supply concerns.

However, the market outlook remains bearish due to ample global inventories and OPEC+’s decision to boost production.

Venezuela holds roughly a fifth of the world’s oil reserves, but analysts caution that increasing output rapidly would be constrained by aging infrastructure, low prices, and political uncertainty.

Crude prices had briefly spiked after US forces seized a Russian-flagged tanker in the North Atlantic for alleged sanctions violations, followed by another seizure in the Caribbean. Yet prices soon resumed their downward trend.

Market Reactions

In equities, Wall Street wobbled after a record-breaking start to the year. The Dow initially rose but later slipped, with the S&P 500 edging slightly higher and the Nasdaq up 0.4 percent. Analyst Axel Rudolph noted that weaker-than-expected US job growth dampened market optimism.

In Europe, Frankfurt hit a record high above 25,000 points, Paris traded flat, and London slid from a record close, pressured by lower oil prices affecting heavyweights BP and Shell, both down more than three percent.

Shares in Warner Bros. Discovery edged higher after its board rejected an improved hostile takeover bid from Paramount, while Netflix and Paramount shares fell slightly.

Key Figures (around 1630 GMT)

West Texas Intermediate: DOWN 1.3% at $56.40 per barrel

Brent North Sea Crude: DOWN 0.7% at $60.25 per barrel

New York – Dow: DOWN 0.3% at 49,305.05 points

New York – S&P 500: UP less than 0.1% at 6,949.00

New York – Nasdaq Composite: UP 0.4% at 23,643.75

London – FTSE 100: DOWN 0.7% at 10,048.21

Paris – CAC 40: FLAT at 8,233.92

Frankfurt – DAX: UP 0.9% at 25,122.26

Tokyo – Nikkei 225: DOWN 1.1% at 51,961.98

Hong Kong – Hang Seng Index: DOWN 0.9% at 26,458.95

Shanghai – Composite: UP 0.1% at 4,085.77

Euro/dollar: DOWN at $1.1688 from $1.1693

Pound/dollar: DOWN at $1.3474 from $1.3503

Dollar/yen: UP at 156.74 yen from 156.59 yen

Euro/pound: UP at 86.73 pence from 86.58 pence