DTN Oil Update
Oil Futures Rise as Trump Sanctions Venezuelan Oil, Gas Trade
HOUSTON (DTN) -- Crude oil futures settled higher on Monday, following the announcement of a 25% trade tariff that the Trump administration will impose on imports from countries buying oil and gas from Venezuela, just one week after the United States levied additional tariffs on Iranian oil trade.
Trump announced Monday that his administration will impose a second tariff on Venezuela, set to take effect on April 2, accusing the South American country of sending Tren de Aragua gang members to the U.S.
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"Any country that purchases oil and/or gas from Venezuela will be forced to pay a tariff of 25% to the United States on any trade they do with our country," President Trump said on his social media platform, Truth Social.
In response to the announcement, the front-month NYMEX West Texas Intermediate futures contract for May delivery hit the $69 mark for the first time since Feb. 28.
This is the second time this year that Trump has announced additional sanctions on Venezuelan oil trade.
On Feb. 27, his government announced the cancellation of a permit issued by the United States under Joe Biden's administration, which allowed Chevron to produce and export Venezuelan oil.
Stricter sanctions recently imposed by the U.S. government on Russian, Iranian and Venezuelan oil sales are expected to set a bullish tone in the oil futures market due to limited global supplies.
As uncertainty on the trade war has put downward pressure on oil futures, the Trump administration has set more aggressive sanctions on Venezuela and Iran. Last week, the U.S. Department of State imposed sanctions on China-based Shandong Shouguang Luqing Petrochemical Co. -- a teapot oil refinery -- 12 entities and one individual, as well as eight vessels shipping millions of barrels of Iranian oil to China.
Meanwhile, traders will continue focusing on the upcoming announcement of new trade tariffs to be imposed by the U.S. government next week. April 2 marks the deadline set by the Trump administration to announce reciprocal trade tariffs on China, Canada, Mexico, and the European Union, all of which have imposed retaliatory tariffs on U.S. products.
The front-month NYMEX WTI futures contract rose by $0.94 to $69.22 bbl, while the ICE Brent futures contract for May delivery increased by $0.96 $73.12 bbl. April RBOB futures contract climbed by $0.0120 to $2.2616 gallon and April ULSD futures increased by $0.0119 to $2.2073 gallon.
The U.S. Dollar Index rose by 0.23% to 103.98 against a basket of foreign currencies.
