Crude oil futures remained steady on Tuesday morning, despite the US issuing a warning of a 25 per cent tariff on US imports from countries that purchase oil from Venezuela, effective April 2.
As of 9:56 am on Tuesday, June Brent oil futures were priced at $72.38, showing a marginal increase of 0.01 per cent, while May crude oil futures on WTI stood at $69.12, reflecting a similar 0.01 per cent hike. On the Multi Commodity Exchange (MCX), April crude oil futures were trading at ₹5,945, up by 0.24 per cent from the previous close, and May futures were at ₹5,934, up by 0.29 per cent.
In a statement on his Truth Social account, US President Donald Trump declared the imposition of a Secondary Tariff on Venezuela, affecting any country that buys oil/gas from Venezuela with a 25 per cent tariff on their trade with the US. This decision is set to take effect on April 2.
Analysts Warren Patterson and Ewa Manthey from ING Think noted that oil prices climbed on Monday following Trump’s announcement of the 25 per cent US tariffs on Venezuelan oil buyers. This news propelled ICE Brent above $73 a barrel, its highest level since late February. They also mentioned that Venezuela had increased its oil production and exports, which could lead to a significant tightening in the global oil balance.
The largest consumers of Venezuelan crude oil are China, the US, and India. However, the US imports are likely to cease as Chevron’s sanction waiver for operating in Venezuela expires on May 27. The analysts anticipate that the tariffs starting on April 2 will support heavier crude oil grades, with Venezuela being a major exporter of such grades.
In other commodity news, OPEC+ is expected to maintain its plan of raising oil output for a second consecutive month in May, notwithstanding steady oil prices and a strategy to compel certain members to reduce pumping to offset past overproduction.
Furthermore, March zinc futures were trading at ₹275.75 on MCX, showing a 0.36 per cent increase, while on the National Commodities and Derivatives Exchange (NCDEX), April jeera contracts were up by 0.59 per cent at ₹22,215, and April castorseed futures were down by 0.22 per cent at ₹6,325.
Overall, the commodity markets continue to navigate through various geopolitical and economic factors, with oil prices being particularly sensitive to global events and trade tensions.
