Trump's tariffs spark oil market surge amid Venezuela tensions
President Donald Trump announced on Monday his intention to impose 25% tariffs on imports from countries purchasing oil and gas from Venezuela. This decision prompted an almost immediate reaction, significantly increasing the price of oil on global markets.
In a Monday post on the Truth Social platform, President Trump stated that "Venezuela has been very hostile to the United States and the Freedoms which we espouse."
Any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country," stated the U.S. president.
He announced that the new tariffs will take effect on 2nd April, which he called "liberation day" — the same day he plans to announce a series of other reciprocal tariffs on other countries.
The market reacts to the announcements. Oil prices rise
The market reacted to Trump's new plans. West Texas Intermediate and Brent oil contracts rose by 1.2%, reaching approximately $69.08 and $73.01 (£53.5 and £56.5) per barrel, respectively.
Trump also accused Venezuela of "purposefully and deceitfully sent to the United States, undercover, tens of thousands of high level, and other, criminals," including gang members from groups like Tren de Aragua, although he provided no evidence for these claims.
The significance of Venezuelan oil for the American economy
Venezuela was one of the main foreign suppliers of oil to the United States last year. According to Commerce Department data, the USA purchased oil and gas worth $5.6 (£4.4) billion from this country in 2024. The increase in supply occurred after the Biden administration temporarily lifted sanctions on Venezuelan oil in 2023, although they were reinstated in April 2024.
Despite the significant increase during this short period, Venezuelan oil and gas supplies were much smaller than imports from Canada, the primary foreign source of oil for the USA. Canada exported oil and gas worth $106 (£82) billion to the United States last year, accounting for 60% of the total import of these resources, while Venezuela accounted for just 3%.
Before Monday's announcement, Trump was already preparing to limit access to Venezuelan oil to the United States by revoking Chevron's license for a joint extraction venture in that country. However, after meeting with Chevron CEO Mike Wirth and other oil industry executives last week, Trump is now considering extending their license, according to an industry source.
Political context and the issue of deportation
The decision to limit Venezuelan oil exports, set to take effect on 3rd April, was presented by the Trump administration in part as a form of punishment for Venezuela's reluctance to accept deported migrants accused of belonging to the notorious Tren de Aragua gang.
Since then, Venezuela has reached an agreement to resume repatriation flights from the USA, receiving 200 deported individuals on Monday. Some relatives of the deported told CNN that their family members were not involved in any criminal activity, and the administration provided very little evidence to dispel such claims.
The announcement of new tariffs on countries purchasing Venezuelan oil comes after reports that Trump intends to delay previously announced tariffs, including 25% fees on imports of pharmaceuticals, cars and timber. These tariffs were set to take effect on 2nd April, the same day Trump announced the introduction of 25% tariffs on countries buying oil from Venezuela.
