West Texas Intermediate (WTI) crude oil prices are trading around $69.60 during the early Asian session on Thursday, extending their rally to a near four-week high. The rise in prices comes amid increasing concerns over tighter global supply, particularly following the US threat to impose tariffs on countries purchasing Venezuelan oil.
WTI prices have been supported by US President Donald Trump’s announcement of a 25% secondary tariff on nations importing Venezuelan oil or gas, effective April 2. This move follows the US’s significant oil trade relationship with Venezuela, as data from the Commerce Department reveals that the United States purchased $5.6 billion worth of oil and gas from Venezuela in 2024, making it one of the country’s top foreign suppliers.
Additionally, a decrease in US crude oil inventories has further contributed to the rally. According to the latest weekly report from the US Energy Information Administration (EIA), crude oil stockpiles in the United States fell by 3.341 million barrels for the week ending March 21. This was in contrast to the previous week’s increase of 1.745 million barrels, and the market consensus had predicted a smaller decline of 1.6 million barrels.
However, the upside potential for WTI prices may be capped by developments in the Russia-Ukraine conflict. A maritime and energy ceasefire between Russia and Ukraine has eased some of the concerns about supply disruptions. The US has brokered deals with both nations to pause attacks on sea lanes and energy targets, alongside efforts to ease certain sanctions on Moscow, which could help alleviate some pressure on global oil markets.
