Oil price spikes after Trump orders blockade of sanctioned Venezuelan tankers

Dubai: Oil prices climbed sharply on Wednesday after US President Donald Trump ordered a blockade of oil tankers heading to and departing from Venezuela that are deemed to be in breach of US sanctions.

Both Brent crude and West Texas Intermediate (WTI) rose by more than 2% in early trading, before giving up some of those gains later in the session, as investors assessed the broader geopolitical implications for global supply.

“The big news is the oil-price rally after President Donald Trump announced an oil blockade on Venezuela,” said Fawad Razaqzada, analyst at Forex.com. He said the move immediately tightened supply expectations in an already sensitive market.

The rally in crude prices spilled over into equity markets, particularly energy stocks in Europe. Shares in BP and Shell rose by more than 1%, helping lift the UK’s FTSE 100, which outperformed other major European indices during the session.

Oil’s rebound followed a sharp sell-off on Tuesday, when crude prices fell about 2.7% after Trump said a deal to end the war in Ukraine was “closer than ever”. Hopes of a peace agreement had raised expectations that sanctions on Russian oil could eventually be eased, adding to concerns about excess supply.

That optimism has now been tempered by uncertainty over Washington’s next steps. Razaqzada noted that while a Ukraine deal could open the door to more Russian barrels entering the market, there are reports the Trump administration is also preparing additional sanctions on Russia’s oil sector if President Vladimir Putin rejects a proposed peace settlement.

The competing signals — tighter enforcement against Venezuela on one hand and the possibility of tougher or looser measures on Russia on the other — have added to volatility in oil markets, keeping traders focused on political developments rather than underlying demand fundamentals.