Oil Prices Climb as Trump Cancels Chevron’s Venezuela License

Oil prices experienced a rise on Thursday, marking the first increase in three days, driven by renewed supply concerns following U.S. President Donald Trump’s decision to revoke Chevron’s license to operate in Venezuela. This move has heightened worries about potential disruptions in oil supply from the South American country.

Brent crude oil futures increased by 24 cents, or 0.33%, reaching $72.77 per barrel, while U.S. West Texas Intermediate (WTI) crude oil futures saw a rise of 18 cents, or 0.26%, to $68.80 per barrel. These increases occurred after both benchmarks settled at their lowest levels since December 10, influenced by a surprise build in U.S. fuel inventories and optimism surrounding a potential peace deal between Russia and Ukraine.

Trump’s announcement to reverse the license granted to Chevron by his predecessor, Joe Biden, more than two years ago, has significant implications. Chevron, which exports approximately 240,000 barrels per day of crude from its Venezuelan operations, accounting for over a quarter of the country’s total oil output, will no longer be able to export Venezuelan crude. This decision is expected to impact global oil markets, potentially leading to supply shortages and price fluctuations.

Market analysts suggest that the cancellation of Chevron’s license has triggered a reversal of recent selling trends, particularly in light of ongoing ceasefire talks between Russia and Ukraine. Additionally, potential buying from the U.S. Strategic Petroleum Reserve has provided support to the market, as WTI crude oil futures were trading near their lowest levels in over two months.

Market participants are closely monitoring Trump’s efforts to broker a peace deal between Russia and Ukraine. Trump announced that Ukrainian President Volodymyr Zelenskiy would visit Washington to sign an agreement on rare earth minerals, with the success of the deal contingent upon the outcome of these peace talks and continued U.S. aid.

Meanwhile, U.S. crude oil stockpiles experienced an unexpected decline last week, accompanied by a slight increase in refining activity, according to the Energy Information Administration. However, gasoline and distillate inventories showed surprising gains, indicating a shift in demand from kerosene to gasoline during the seasonal off-peak period.

Goldman Sachs has noted that the U.S. administration’s dual objectives of commodity dominance and affordability reinforce the bank’s baseline range for Brent crude oil prices between $70 and $85 per barrel, a range that supports robust U.S. supply growth.