Oil prices extended gains in Asian trading on Thursday after U.S. President Donald Trump ordered a blockade of sanctioned oil tankers entering and leaving Venezuela.
Oil was also supported by reports that Washington is preparing tougher measures against Russia’s energy sector, adding to concerns about global supply risks.
As of 21:58 ET (02:58 GMT), Brent Oil Futures expiring in February rose 0.7% to $60.08 per barrel, while West Texas Intermediate (WTI) crude futures gained 0.8% to $56.39 per barrel.
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US-Venezuela tensions, Russia supply risks in focus On Tuesday, Trump announced a blockade targeting tankers carrying Venezuelan oil that are already under U.S. sanctions, escalating pressure on President Nicolas Maduro’s government and raising fears of further disruptions to exports from the OPEC member.
Venezuela’s crude shipments have already been constrained by years of U.S. sanctions, and the latest move could tighten supply further if enforcement is stepped up.
"The key questions are, first, how effective this blockade will be, and second, how long it will last. This will be important in determining the impact on the oil market," ING analysts said in a note.
Adding to the bullish tone, media reports said the U.S. government is preparing even stricter sanctions on Russia’s energy sector should efforts to secure a peace deal in Ukraine fail.
The measures under discussion could target parts of Russia’s oil production, shipping, and export infrastructure, potentially curbing flows from one of the world’s largest crude exporters.
"Given the surplus outlook and Brent trading around $60/bbl, Trump has room to be more aggressive with sanctions," ING analysts added.
US crude stocks decline less than expected - EIA On the data front, weekly figures from the U.S. Energy Information Administration showed U.S. crude oil inventories fell by 1.27 million barrels in the week ended Dec. 12, less than forecasts of a 2.4 million barrel decline.
However, the report also pointed to rising refined fuel stocks, with gasoline inventories increasing by 4.81 million barrels and distillate fuel oil stocks up by 1.71 million barrels, suggesting softer demand for fuel products.
