Global oil prices continued to decline on Wednesday, January 7, following U.S. President Donald Trump’s announcement of potential significant shipments of Venezuelan oil to the United States.
This is reported by Finway
Oil Market Price Dynamics
The price of West Texas Intermediate (WTI) crude oil dropped by 78 cents, or 1.37%, to $56.35 per barrel. Meanwhile, Brent crude futures fell by 61 cents, or 1%, to $60.09 per barrel. It was noted that during earlier trading sessions, both benchmark grades had already shown a decline of more than $1 amid concerns over global supply levels and uncertainty surrounding oil production in Venezuela following the power takeover by the country’s leader, Nicolás Maduro.
Market Reaction and Impact on the Oil Industry
The fluctuations in the market were triggered by Donald Trump’s remarks about Venezuela’s plans to send between 30 to 50 million barrels of sanctioned oil to the U.S. In his social media post, the U.S. president emphasized:
“This oil will be sold at market price, and the money will be controlled by me, as President of the United States, to ensure it is used for the benefit of the people of Venezuela and the U.S.”
According to market strategist Tina Teng from Moomoo ANZ, Trump’s statement indicates an intention to increase oil supply rather than restrict it. This, in turn, heightens concerns about an oversupply of crude on the global market.
Venezuela is currently selling its main grade of crude oil, Merey, at a significant discount—approximately $22 cheaper than Brent. Chevron, which is a key partner of the state-owned oil and gas company PDVSA, is currently exporting between 100,000 to 150,000 barrels of Venezuelan oil to the U.S. daily. Chevron remains the only company that has been able to maintain uninterrupted shipments of crude oil from Venezuela during the blockade in recent weeks.
According to Haitong Futures analyst Yan An, the export of Venezuelan oil to the U.S. complicates the American market and may exacerbate the global oversupply situation.