Oil futures are trading higher on Wednesday after President Trump ordered a blockade on sanctioned oil tankers entering and leaving Venezuela. The country holds the largest proven oil reserves in the world, which means that a blockade could restrict global supply.
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“For the theft of our Assets, and many other reasons, including Terrorism, Drug Smuggling, and Human Trafficking, the Venezuelan Regime has been designated a FOREIGN TERRORIST ORGANIZATION,” Trump said in a Truth Social post. “Therefore, today, I am ordering A TOTAL AND COMPLETE BLOCKADE OF ALL SANCTIONED OIL TANKERS going into, and out of, Venezuela.”
Oil Reacts to Ukraine-Russia Peace Talks, Blockade Threats
On Tuesday, oil futures fell below $55 per barrel, the lowest level since February 2021, following news that Ukraine and Russia had made progress in peace talks. A ceasefire between the two countries could result in the U.S. lifting sanctions on Russian oil and boosting supply.
Venezuela said that it would reject Trump’s “grotesque threat,” while U.S. Representative Joaquin Castro warned that his actions could result in a “war that the Congress never authorized and the American people do not want.” It isn’t immediately clear how Trump will move forward with the blockade or how many tankers will be affected.
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