Secondary tariffs on Venezuelan oil buyers - ING

Oil prices rose yesterday after President Trump announced 25% US tariffs on any country buying Venezuelan oil, ING's commodity experts Ewa Manthey and Warren Patterson note.

Chevron's sanction waiver to operate in Venezuela expires on 27 May

"The news helped ICE Brent break above US$73/bbl, settling at its highest since late February. Oil, along with broader risk assets, also benefited from suggestions the Trump administration may take a more targeted approach with reciprocal tariffs."

"In recent years, Venezuela increased oil production and exports as the Biden administration eased sanctions, providing a waiver to Chevron to operate in the country. Venezuela produced 918k b/d of crude oil in February, up from 760k b/d in 2023, while it exports around 750k b/d. As such, this move could mean a fairly sizeable tightening in the global oil balance."

"The largest buyers of Venezuelan crude oil are China, the US and India. However, the volumes to the US should stop as Chevron's sanction waiver to operate in Venezuela expires on 27 May. Also, tariffs will start on 2 April, the same day broader reciprocal levies may be introduced. This should be supportive for heavier crude oil grades, of which Venezuela is a key exporter."