WTI Crude Jumps as Trump Orders Blockade of Sanctioned Tankers

Venezuela Blockade and Geopolitical Risk

The US administration has ordered a blockade of all oil tankers under sanctions entering or leaving Venezuela. This action is designed to increase pressure on the Maduro administration but has had the immediate side effect of injecting volatility into the oil market. While Venezuela accounts for only about 1% of global supply, the move signals a harder line on enforcement that could impact 'dark fleet' tankers used by other sanctioned nations.

Inventory and Supply Balance

Despite the geopolitical flare-up, the broader market continues to grapple with a swelling surplus of global crude. US fuel inventories have shown growth, which has tempered the recent price rise. Furthermore, signs of progress in Russia-Ukraine peace talks suggest that Western sanctions on Moscow could eventually be eased, potentially freeing up more supply in a market already struggling with fragile demand.