President Donald Trump said Monday that the U.S. will impose 25% tariffs on countries that buy oil and gas from Venezuela, as he seeks to increase pressure on President Nicolas Maduro and China.
Countries that buy oil and gas from Venezuela will face tariffs on any trade they have with the U.S., Trump said in a post on his social media platform Truth Social. The tariffs take effect on April 2, the president said.
Venezuela exported about 660,000 barrels per day in 2024, according to data from Kpler. China was the largest destination for the South American nation’s crude exports, purchasing 270,000 bpd last year.
“This announcement by the Trump administration appears to be one more action targeting China,” Matt Smith, an oil analyst at Kpler, told CNBC.
Brent crude futures rose 61 cents, or 0.85%, to $72.77 a barrel by 1:15 p.m. ET. U.S. West Texas Intermediate crude was up 59 cents, or 0.86%, at $68.87.
“We expect oil prices to go higher in light of this news and may rise further if Trump follows through with this proclamation,” analyst Leo Mariani at Roth told clients in a note.
The U.S. was the second-largest destination for Venezuelan crude last year, importing about 233,000 bpd, according to Kpler. India purchased about 61,000 bpd and Spain bought nearly 60,000 bpd in 2024.
Trump has sought to increase pressure on the Maduro regime since taking office. The president accused Venezuela of sending Tren de Aragua gang members to the U.S. when announcing the tariffs on Monday. The Trump administration has designated the gang as a foreign terrorist organization.
Chevron license extended
The Treasury Department on Monday also extended Chevron’s license to produce oilin Venezuela until May 27. Trump said in late February that he would reverse a Biden administration decision which allowed Chevron to restart oil production in the country. Treasury had previously given the oil major until April 3to wind down its operations in Venezuela.
Chevron CEO Mike Wirth lobbied Trump administration officials to extend the license during meetings last week, people familiar with the discussions told The Wall Street Journal. Chevron does business in Venezuela through a partnership with its national oil company Petróleos de Venezuela. The oil major has stakes in five onshore and offshore projects in western and eastern Venezuela.
The tariffs are intended to make it more difficult for China to gain a foothold in Venezuela’s oil industry while bolstering Chevron and ensuring oil flows to the U.S., people familiar with the matter told the Journal last week.
Trump invoked the 1798 Alien Enemies Act on March 15 in response to what the president claims is an invasion by Tren de Aragua. The president said its members are conducting “irregular warfare” against the U.S. at the direction of Maduro.
Federal District Court Judge James Boasberg has blocked Trump’s plan to deport alleged members of Tren de Aragua using the Alien Enemies Act. Trump has called for Boasberg’s impeachment, sparking fears among some legal experts that the U.S. is facing a constitutional crisis. Supreme Court Chief Justice John Roberts has rebuked Trump’s calls for Boasberg to be removed.
By CNBC
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