Global oil prices climbed on Wednesday after the United States escalated pressure on Venezuela and as Ukraine confirmed fresh strikes on Russian energy infrastructure, reviving short-term supply risk concerns.
West Texas Intermediate (WTI) crude rose more than 2.4% to about $56.7 per barrel, while Brent gained roughly 2.3% to $60.3, rebounding from multi-year lows.
The rally followed President Donald Trump’s order for a “total and complete blockade” of sanctioned oil tankers entering or leaving Venezuela, a move that markets viewed as a material escalation in U.S. enforcement actions.
Venezuela Blockade Raises Supply Risk
Trump said the blockade targets vessels linked to Venezuela’s sanctioned oil trade and accused the Maduro government of “drug terrorism” and theft of U.S. assets. He warned the operation would expand if Caracas failed to comply with U.S. demands.
Analysts estimate the action could disrupt a meaningful share of Venezuela’s roughly 850,000 barrels per day in exports, most of which flow to China through sanction-evasion routes. MUFG analyst Soojin Kim said prolonged enforcement could affect exports of around 590,000 barrels per day.
China, Venezuela’s largest buyer, has already increased crude inventories in recent months, a move analysts see as a buffer against tighter U.S. enforcement. However, Chinese refiners are now demanding steep discounts to offset seizure risks.
Traders reported that discounts on Venezuela’s Merey heavy crude widened sharply to as much as $21 per barrel below Brent, compared with $14–$15 just a week earlier.
More than 11 million barrels of Venezuelan crude are currently stranded on tankers as buyers renegotiate terms. PDVSA also temporarily suspended some deliveries this week following a cyberattack on its administrative systems.
Chevron remains the only operator moving crude out of Venezuela without disruption, under a specific U.S. license. LSEG data showed a Chevron-chartered tanker departed without incident earlier this week.
Ukraine Expands Strikes on Russian Energy Assets
Supply concerns deepened after Ukraine confirmed a successful drone strike on the Slavyansk-on-Kuban refinery in southern Russia, which processes about 5.2 million tonnes of crude annually.
The attack caused fires, power outages affecting more than 38,000 residents, and injuries to two people, according to local officials. The strike followed recent attacks on other Russian refineries, including assets in the Caspian Sea and the Saratov region.
The widening campaign suggests Ukrainian forces can now reach targets previously considered secure, keeping Russian oil logistics under sustained pressure despite ongoing peace discussions.
Bearish Forces Still Cap the Rally
Despite the price jump, analysts cautioned that broader bearish forces remain intact. Weak Chinese demand, heavy global inventories, and optimism around Russia-Ukraine ceasefire talks continue to weigh on prices.
The U.S. has also threatened new sanctions targeting Russia’s “shadow fleet” of tankers if Moscow rejects a peace deal. However, traders remain skeptical that enforcement will escalate enough to tighten balances materially.
“An extreme price rally is unlikely without broader retaliation,” said Emril Jamil of LSEG, noting that the global supply glut still dominates market fundamentals.
Brent crude remains down about 20% year-to-date, and several traders described Wednesday’s move as sentiment-driven rather than structural.
While geopolitical risk has returned to the foreground, markets appear cautious, weighing near-term supply threats against persistent demand weakness and excess capacity.