Crude prices surge after Trump orders Venezuela oil blockade

AFP | London

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Oil prices surged on Wednesday after US President Donald Trump ordered a blockade of “sanctioned” oil tankers heading to and leaving Venezuela.

Both Brent and WTI contracts jumped more than 2% before paring gains.

“The big news is the oil-price rally after President Donald Trump announced an oil blockade on Venezuela,” said Forex. com analyst Fawad Razaqzada.

“The news lifted shares in energy stocks in Europe -- the likes of BP and Shell helping the UK’s FTSE 100 to outperform,” he added.

Shares in both companies were up around two% in afternoon trading in London.

The gains for crude pared some of the 2.7% in losses suffered Tuesday after the US president said a deal to end the war in Ukraine was closer than ever.

Such a development could ease sanctions on Russian oil, adding to oversupply concerns already weighing on the market. But Razaqzada noted there are reports that the Trump administration is preparing further sanctions on Russia’s oil sector in the event Russian President Vladimir Putin rejects a Ukraine peace deal.

Stock indices opened higher on Wall Street, while Europe and Asia were mixed.

London’s stock market rallied as the pound faltered on expectations of cuts to Bank of England interest rates, after data showed UK inflation falling faster than forecast.

Britain’s annual inflation rate slowed to 3.2% in November, cementing expectations that the Bank of England will cut its main interest rate on Thursday and again on more than one occasion in 2026.

Analysts had expected inflation to have cooled only slightly to 3.5% from 3.6% in October.

Eurozone inflation remained at 2.1% in November, hovering just above the target set by the European Central Bank, slightly revised official data showed Wednesday.

The ECB is expected to hold interest rates steady Thursday for its fourth straight meeting with inflation in check, although debate is heating up about the path forward.

Investors continued to study Tuesday’s release of US nonfarm payrolls reports, which showed that unemployment in the world’s biggest economy had jumped to a four-year high of 4.6% in November.

Analysts said the data did little to change expectations that the Federal Reserve would likely keep key US interest rates unchanged in January. In corporate news, the share price of Chinese chipmaker MetaX Integrated Circuits Shanghai soared more than 550% on its home-city debut Wednesday.