Easy Trading Tips – Oil prices extended their rally for a fifth straight day on Tuesday, driven by mounting concerns over global supply disruptions following the U.S. decision to impose tariffs on nations purchasing Venezuelan crude.
As of 07:49 GMT, Brent crude futures edged up by 27 cents, reaching $73.27 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 26 cents to hit $69.37 per barrel.
Both crude benchmarks surged over 1% in the previous session after U.S. President Donald Trump announced a 25% tariff on countries importing Venezuelan oil and gas. Venezuela heavily relies on oil exports, with China, already entangled in a trade dispute with the U.S., being its largest buyer.
“This policy shift could significantly tighten global oil supply,” noted analysts from ING in a Tuesday report.
Market experts also observed that oil prices, along with other risk-sensitive assets, were buoyed by speculation that the Trump administration might adopt a more selective approach to the reciprocal tariffs set to take effect on April 2.
“Investors remain cautious as Trump’s tariff policies could potentially slow economic growth and dampen oil demand,” said Tsuyoshi Ueno, senior economist at NLI Research Institute. “However, with stricter U.S. sanctions on Venezuelan and Iranian oil likely to constrain supply, price volatility remains high, making it challenging to take large positions.”
Ueno further predicted that WTI crude is expected to hover around the $70 mark throughout the year, with possible seasonal upticks as the U.S. and other nations enter peak driving season.
Adding to supply concerns, the U.S. recently introduced new sanctions aimed at curbing Iranian oil exports.
Meanwhile, the Trump administration has extended a deadline until May 27 for U.S. energy giant Chevron (NYSE:CVX) to cease operations in Venezuela. Analysts at ANZ estimate that the expiration of Chevron’s license could slash Venezuelan oil production by approximately 200,000 barrels per day.
In other tariff-related developments, Trump announced impending automobile tariffs while hinting at potential exemptions for certain nations. This unexpected flexibility provided a measure of relief to financial markets, which have been unsettled by trade policy uncertainties.
On the supply front, sources indicate that OPEC+—the coalition of the Organization of the Petroleum Exporting Countries and its allies, including Russia—will likely maintain its strategy of increasing oil production for a second consecutive month in May. The decision comes amid stable oil prices and an initiative to enforce production cuts on members that previously exceeded their quotas.
With geopolitical tensions and shifting trade policies shaping market movements, oil traders remain on high alert for further developments that could impact global supply and demand dynamics.