Oil prices weakened after US officials signalled that Washington intends to exercise long-term control over Venezuelan oil sales, raising expectations of additional crude supply entering global markets. The development comes at a time when traders are already wary of oversupply risks amid uneven demand growth.
President Donald Trump said Venezuela could sell up to 50 million barrels of sanctioned crude to the US, a move that would effectively create a release valve for oil that has struggled to reach buyers under sanctions.
The US Department of Energy has said it has already begun marketing Venezuelan oil internationally, while the US energy secretary indicated that Washington plans to oversee future Venezuelan oil exports indefinitely. Despite this shift, restrictions on sanctioned tankers remain in place, with the US seizing two additional vessels this week, underlining its control over the trade.
Routing Venezuelan oil through US-controlled channels could ease storage pressures in the country and reduce the likelihood of output cuts, potentially allowing production to stabilise or rise after years of decline.
US crude inventories offered limited support to prices. Data from the Energy Information Administration (EIA) showed crude stockpiles fell by 3.83 million barrels last week, the largest draw since late October.
However, the bullish impact was offset by sharp builds in refined products. Gasoline inventories rose by 7.7 million barrels, while distillate stocks increased by 5.6 million barrels, reflecting strong refinery runs and softer implied demand.
Washington’s growing influence over Venezuela’s oil sector has also raised questions about the country’s future role within OPEC, where production policy is traditionally coordinated independently of external powers.
With supply-side risks easing and demand signals mixed, analysts say crude markets may remain under pressure in the near term as traders reassess the balance between geopolitics and fundamentals.
