Oil edged higher as traders digested more measures from the US regarding Venezuela, including a plan to indefinitely control future crude sales and the seizure of two more sanctioned tankers.
West Texas Intermediate was around $56 a barrel after declining 4% over the previous two sessions. Brent settled below $60. Energy Secretary Chris Wright said the US would initially start offering stored crude and then sell Venezuelan supply. The Energy Department said oil was already being marketed.
Venezuela’s state oil company said that it’s in negotiations with Washington over crude sales through a framework similar to an arrangement with Chevron Corp., the only US major operating the in the country.
President Donald Trump is pushing for US companies to rebuild Venezuela’s energy industry, which is in poor shape after years of neglect, and is due to meet energy executives on Friday. The administration has started selectively rolling back sanctions on the country’s oil sector as part of that effort.
Citgo Petroleum Corp., the US refiner indirectly owned by Venezuela is considering resuming purchases for the first time since sanctions cut off its supply in 2019, while Trafigura Group has expressed interest. Chevron is also in talks with the US to extend its license to operate in the country.
On Tuesday, Trump said Venezuela would relinquish as much as 50 million barrels to the US, worth more than $2 billion, and announced cargoes would be sold with proceeds to benefit both countries. Revenue from sales will be held in US Treasury accounts, according to a person familiar with the matter.
Global benchmark futures have started the year on a soft footing, following the steepest annual decline since 2020. The prospect of higher Venezuelan exports has already sent Canadian crude prices plunging, and would add barrels to a market grappling with ample supply, as OPEC+ and others pump more.
Still, the naval blockade of Venezuela is continuing, as the Trump administration maintains its pressure on the South American government. The US seized two more sanctioned oil tankers, including the Bella 1 — a vessel that was chased after it evaded capture. The ship registered under a Russian flag in a bid to protect itself, but was intercepted south of Iceland.
Prices
WTI for February delivery rose 0.6% to $56.32 a barrel at 8:31 a.m. in Singapore.
Brent for March settlement closed 1.2% lower at $59.96 a barrel on Wednesday.
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