Brent crude oil futures climbed above $73 per barrel on Wednesday, driven by supply concerns and a larger-than-expected drop in US crude inventories.
Oil rises on supply concerns
On Monday, President Trump signed an executive order imposing 25% tariffs on imports from countries buying Venezuelan oil, a move that could disrupt supply chains to key refiners, particularly in China, India, and Spain. Additionally, the Trump administration extended Chevron’s deadline to exit Venezuela until May 27, with analysts predicting the withdrawal could reduce production by 200,000 barrels per day. Meanwhile, API data revealed that US crude oil inventories dropped by 4.6 million barrels last week, exceeding market expectations of a 2.5 million-barrel decline.
Ceasefire talks temper oil gains
However, oil's gains were tempered as the US brokered agreements with Ukraine and Russia to cease attacks at sea and on energy infrastructure. The US also pledged to push for some sanctions relief on Moscow, a move that could potentially allow Russian oil to return to global markets, easing supply concerns.
