A fresh wave of U.S. policy shifts is nudging oil markets upward, creating renewed interest from investors watching global supply dynamics tighten. With Venezuela facing steeper trade hurdles and Chevron granted more operational leeway, oil prices are responding to a reshaped geopolitical and regulatory landscape.
Brent crude climbed 1.2% to reach $73 per barrel, while West Texas Intermediate advanced to $69.11, also up 1.2%. The gains were sparked by U.S. President Donald Trump’s announcement of a proposed 25% tariff on countries purchasing Venezuelan oil and gas. While details on enforcement remain unclear, the intention has added a bullish tone to the market, tightening global availability and shifting trade patterns.
At the same time, the U.S. Treasury extended Chevron’s licence to operate in Venezuela until 27 May, easing immediate pressure on the American oil major. The contrasting moves—pressuring external buyers while supporting domestic producers—reflect a calculated strategy that favours U.S. energy interests while further isolating Venezuela’s state-run exports.
Oil price momentum was tempered slightly by signals that OPEC+ will proceed with a planned output increase in May. Additionally, ongoing peace talks aimed at resolving the Ukraine conflict could pave the way for increased Russian crude supply, creating a potential counterbalance to recent supply disruptions.
Adding another layer of complexity, the U.S. unveiled new sanctions last week aimed at curbing Iranian oil exports, including targeting a Chinese “teapot refinery” processing Iranian crude. If enforced broadly, these measures could constrain Asia-bound supply and support prices further.
Markets found added support from Wall Street, which rallied on expectations that the Trump administration will take a more flexible stance on trade negotiations with key partners like China. Trump also hinted at upcoming tariffs on automobiles, aluminium, and pharmaceuticals—suggesting a broader trade recalibration is underway. Meanwhile, the president urged the Federal Reserve to lower interest rates to stimulate growth, a move that would likely support energy demand.
Although the Fed kept rates steady last week, Atlanta Fed President Raphael Bostic now anticipates only a modest quarter-point rate cut this year, citing slower inflation progress.
In parallel, U.S. and Russian officials met in Saudi Arabia to discuss a potential ceasefire in Ukraine, including maritime agreements in the Black Sea. Any resolution that boosts Russian oil exports could weigh on prices, but for now, the market remains buoyed by tightening near-term supply.
Dennis Kissler of BOK Financial highlighted the bullish undertone created by declining Venezuelan exports, though he noted the risk posed by a return of Russian barrels to the global market.
Challenger Energy Group Plc (LON:CGE) is an Atlantic-margin focused energy company, with production, development, appraisal, and exploration assets in the region. Challenger Energy’s primary assets are located in Uruguay, where the Company holds two high impact offshore exploration licences, totalling 19,000km2 (gross) and is partnered with Chevron on the AREA-OFF 1 block. Challenger Energy is quoted on the AIM market of the London Stock Exchange.
