Brent crude oil futures rose toward $73 per barrel, reaching their highest level in over three weeks, after President Trump announced a proposed 25% tariff on any country purchasing Venezuelan oil, heightening tensions with the Maduro regime.
Oil market reaches three-week high
The move is seen as a direct challenge to Venezuela’s oil exports, with China, one of the largest buyers of Venezuelan crude, likely to be heavily impacted. This escalation in geopolitical risks surrounding oil supply has added upward pressure on prices, as markets react to the potential disruption of Venezuelan oil exports.
Meanwhile, OPEC+ is set to proceed with a second consecutive production hike in May, raising output by 135,000 barrels per day (bpd), despite ongoing efforts to enforce compensatory cuts on overproducing members. The group has been implementing significant production cuts of 5.85 million bpd since 2022 as part of efforts to balance global oil markets, but it aims to gradually unwind these reductions as the market stabilizes. This planned output increase reflects confidence in market recovery and the group's desire to meet rising demand while maintaining price stability.
OPEC+ meeting in focus
An OPEC+ ministerial meeting on April 5 will be key in refining production strategies, with Russia signaling that it may reverse its course on output increases if significant market imbalances emerge. If the market experiences unexpected oversupply or weak demand, OPEC+ may adjust its plans to avoid a price crash. As the group navigates a complex balance between boosting production and keeping prices stable, traders and investors will be closely watching the April 5 meeting for any signs of shifts in the group’s stance or additional measures to support oil prices.
