TOKYO/SINGAPORE, March 25 (Reuters) – Oil prices increased for the fifth consecutive day on Tuesday as concerns grew over tighter global supply following the U.S. announcement of tariffs on countries importing Venezuelan crude. By 0749 GMT, Brent crude futures were up 27 cents, reaching $73.27 a barrel, while U.S. West Texas Intermediate crude rose 26 cents to $69.37.
Both benchmarks rose by more than 1% in the previous session following U.S. President Donald Trump’s announcement of a 25% tariff on countries importing oil and gas from Venezuela. Oil is Venezuela’s primary export, with China—already facing U.S. tariffs—being its largest buyer.
This move could lead to a significant tightening in the global oil market, ING analysts noted in a report on Tuesday. They also pointed out that oil, along with other risk assets, benefited from indications that the Trump administration might adopt a more targeted approach with the reciprocal tariffs set to take effect on April 2.
“Investors are concerned that Trump’s various tariffs could slow the economy and reduce oil demand, but the potential for tighter U.S. sanctions on Venezuelan and Iranian oil, along with his quick policy changes, make it challenging to take large positions,” said Tsuyoshi Ueno, senior economist at NLI Research Institute.
“We expect WTI to hover around $70 for the remainder of the year, with potential seasonal gains as the U.S. and other countries enter the driving season,” he added.
Last week, the U.S. imposed new sanctions aimed at reducing Iranian oil exports. Additionally, the Trump administration extended the deadline for U.S. producer Chevron (CVX.N) to wind down its operations in Venezuela until May 27.
The revocation of Chevron’s operating license could lead to a reduction in production by approximately 200,000 barrels per day in Venezuela, according to ANZ analysts.
Trump also announced that automobile tariffs are coming soon, although he suggested that not all of his threatened levies would take effect on April 2, and some countries might receive exemptions. Wall Street interpreted this as a sign of flexibility on an issue that has caused market turbulence for weeks.
Meanwhile, OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, is expected to continue its plan to increase oil output for the second consecutive month in May, according to four sources who spoke to Reuters. This decision comes as oil prices remain steady, with plans to require some members to cut production to make up for past overproduction.
