U.S. Enforces Blockade on All Sanctioned Oil Tankers Into Venezuela

SECAUCUS, NJ (DTN) – U.S.  President Donald Trump has ordered a blockade of all sanctioned oil tankers into Venezuela, as his administration extended its  pressure campaign against the OPEC-member,  which exported nearly 1 million bpd last month.

“Venezuela is completely surrounded by the largest Armada ever assembled in the History of South America,” Trump wrote on his social media platform late Tuesday (12/17). “It will only get bigger, and the shock to them will be like nothing they have ever seen before — Until such time as they return to the United States of America all of the Oil, Land, and other Assets that they previously stole from us,” Trump said. 

The order means that If a blacklisted tanker tries to enter or leave Venezuela, the U.S. Navy or Coast Guard may board it, seize the oil, or force it to turn around.

Crude and gasoline futures, which hit multi-year lows in Tuesday’s trading, rebounded Wednesday (12/17) on news of the blockade. NYMEX WTI for January delivery was up $1.04, or 2%, at $56.31 bbl after briefly falling beneath the key $55 bbl support on Tuesday. NYMEX front-month gasoline rose $0.0161 to $1.6970 after a drop beneath $1.60 in the prior session.

Venezuela averaged between 921,000 and 967,000 bpd of exports in November, with most of those shipments destined for China, according to cargo surveyors.

The Trump administration has mounted a massive pressure campaign against the regime of Venezuelan President Nicolas Maduro, in support of the Latin American country’s democratic opposition leader María Corina Machado.

The naval blockade comes after the seizure of a loaded Venezuelan oil tanker by U.S. forces last week.