At the time of writing, Brent crude was trading at $73.91 per barrel while West Texas Intermediate was changing hands for $69.80 per barrel, both set to end the week about $1 per barrel higher than they started it.

“The potential loss of Venezuelan crude exports to the market due to secondary tariffs and the possibility of the same being imposed on Iranian barrels has caused an apparent tightness in crude supply,” Sparta Commodities analyst June Goh told Reuters.

On Monday, President Trump said in an executive order that “On or after April 2, 2025, a tariff of 25 percent may be imposed on all goods imported into the United States from any country that imports Venezuelan oil, whether directly from Venezuela or indirectly through third parties.”

This caught many traders and refiners off guard, especially in China, which is the biggest buyer of Venezuelan crude. It is also the biggest buyer of Iranian crude, which also came under attack from the Trump administration as soon as this administration took office.

Energy consultancy Rystad Energy recently warned in a report that the Iranian sanction push could have a destabilizing effect on global oil markets and push prices higher. Noting that “almost all Iranian crude exports make their way to China, so achieving effective maximum pressure would require cooperation from the Chinese government,” Rystad went on to point out that it was Chinese refiners that turned into a U.S. sanction target earlier this year.

“There have been fundamental justifications for the recent bounce in oil, yet one cannot help but conclude that it is the US trade policy that will be the ultimate and anxious judge of the direction of the next $10 to $15-a-barrel move,” PVM analyst Tamas Varga told Bloomberg.

NEWS: Oilprice.com