Trump’s Venezuela Oil Blockade Unlikely to Disrupt Global Crude Markets: Kpler
New Delhi: US President Donald Trump’s latest move to escalate pressure on Venezuela by announcing a blockade on sanctioned oil tankers is unlikely to significantly impact the global crude oil market, according to global data and analytics firm Kpler. Despite heightened geopolitical tension, oil prices have remained largely stable, reflecting strong underlying supply conditions.
Kpler estimates that Venezuela is producing around 900,000 barrels per day of crude oil and condensate in 2025, accounting for roughly 1 per cent of global oil supply. Of the 765,000 barrels per day exported by the country, nearly three-fourths are shipped to China, mainly to independent refiners known as teapot refiners. State-owned companies have largely avoided these cargoes due to sanctions-related risks.
The United States currently receives about 17 per cent of Venezuela’s oil exports, a sharp drop from 35 per cent last year following changes to Chevron’s operating license. The remaining volumes are sent primarily to Cuba, with smaller shipments reaching countries such as Spain and Italy under older agreements.
Trump’s announcement of a blockade on sanctioned oil tankers is aimed at tightening economic pressure on the Venezuelan government by targeting its primary revenue stream. However, enforcement details remain unclear, even as US military assets have been positioned in the region. Analysts note that the lack of clarity has limited market reaction so far.
Kpler says the move adds some geopolitical risk to Brent crude prices but does not alter broader market fundamentals. The global oil market remains well supplied, and disruptions to Venezuelan exports would affect only a narrow group of buyers. Shipments deemed legitimate, including those linked to US-approved licenses, are expected to continue largely unaffected.
China and Cuba are likely to feel the most impact if Venezuelan supplies become inconsistent. Cuba currently imports around 28,000 barrels per day, with Venezuela accounting for about one-third of its crude intake. While this could pose challenges, alternative supplies from Russia and Mexico may help offset disruptions.
Chinese teapot refiners may also face short-term uncertainty, but the effect is expected to be softened by high volumes of Venezuelan oil already in transit and abundant supplies from Iran and Russia. Price data suggests Venezuelan crude continues to trade at a steep discount due to surplus availability.
Kpler data shows floating storage of Iranian, Venezuelan and Russian crude has reached 74 million barrels, the highest level since late 2022, reinforcing the view that the market remains oversupplied.
Our Final Thoughts
Trump’s latest move against Venezuela underscores how geopolitical actions do not always translate into immediate market disruption. With global crude supply remaining abundant and alternative sources readily available, the oil market has shown resilience despite rising tensions. The situation highlights a two-tiered market structure where sanctioned oil continues to find buyers at discounted prices. While Venezuela and select importers like China and Cuba may face operational uncertainty, broader global oil dynamics remain largely unchanged. Unless enforcement becomes significantly more aggressive or supply tightens elsewhere, analysts expect oil prices to stay guided by fundamentals rather than political signals alone.