Global oil prices fell further on Wednesday after former U.S. President Donald Trump announced that millions of barrels of Venezuelan crude would be transferred to the United States and sold on the international market.
Crude prices have been volatile in recent days following Trump’s declaration that the United States had removed Venezuelan President Nicolás Maduro from power and would temporarily oversee the country’s affairs, including gaining “total access” to its vast oil resources.
Oil markets reacted sharply to Trump’s latest statement, with both major crude benchmarks dropping by more than one per cent on Wednesday, extending losses recorded the previous day.
In a post on his Truth Social platform, Trump said Venezuela’s interim authorities would hand over between 30 and 50 million barrels of what he described as “high-quality, sanctioned oil” to the United States.
“This oil will be sold at its market price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States,” Trump wrote.
Market analysts said the proposed shipments could ease pressure on Venezuela’s oil industry by reducing the risk of production cuts caused by limited storage capacity. However, they added that the broader outlook for oil prices remains weak.
The crude market is currently well supplied, following a decision by OPEC and its allies to increase output, further weighing on prices.
Although Venezuela holds nearly 20 per cent of the world’s proven oil reserves, analysts noted that any rapid increase in production would face major hurdles, including ageing infrastructure, low investment levels and lingering political uncertainty.
Meanwhile, global stock markets were mixed after a strong start to the year that has seen several major indices hit record highs, driven largely by investor enthusiasm for artificial intelligence-related stocks.
South Korea’s Kospi index extended its rally on Wednesday, while markets in Shanghai, Sydney, Wellington, Manila and Jakarta also posted gains. However, Hong Kong slid by more than one per cent, with losses also recorded in Singapore, Taipei and Mumbai.
Japan’s Nikkei index fell sharply after China announced stricter export controls on products sent to Japan that could have potential military applications.
Despite rising geopolitical tensions, market analysts remain optimistic about the outlook for global equities.
Michael Brown of Pepperstone said investors continue to focus on expectations of steady economic growth and strong corporate earnings, supported by prospects of looser monetary and fiscal policies over the next year.
“Any market pullbacks are still being viewed as buying opportunities,” Brown said.
Market Snapshot (around 7:15am GMT)
West Texas Intermediate: down 1.6% at $56.24 per barrel
Brent crude: down 1.2% at $60.00 per barrel
Tokyo Nikkei 225: down 1.1%
Hong Kong Hang Seng: down 1.3%
Shanghai Composite: up 0.1%
Dow Jones: up 1.0%
FTSE 100: up 1.2%
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