27 Feb 2025

West Texas Intermediate (WTI) Oil prices remain stable amidst supply apprehensions following President Trump's decision to cancel Chevron's oil license in Venezuela. The oil market is experiencing challenges due to increasing worries about global economic growth, compounded by concerns that tariffs imposed by Trump may dampen demand. Additionally, the prospect of a peace agreement between Russia and Ukraine, along with the potential relaxation of sanctions on Russia, has negatively impacted oil prices.

Currently, WTI oil is trading around $68.70 per barrel during European trading hours on Thursday, maintaining its position above the two-month low of $68.29 recorded on February 26. The market is receiving some support from supply issues, particularly after Trump announced the revocation of Chevron Corp.'s oil license in Venezuela. This decision has been met with criticism from Venezuelan Vice President Delcy Rodriguez, who described it as "damaging and inexplicable." Chevron is responsible for exporting approximately 240,000 barrels per day (bpd) of crude from its Venezuelan operations, which represents more than a quarter of the nation's total oil production.

With the license now revoked, Chevron will be prohibited from exporting Venezuelan crude. Crude oil prices encountered challenges due to escalating concerns regarding global economic growth. There are apprehensions that tariffs imposed by US President Donald Trump on China and other trading partners may diminish demand. On Wednesday, President Trump reiterated his commitment to implement 25% tariffs on Canada and Mexico, while also expressing intentions to include the European Union among the nations subject to trade penalties for exports to the United States. Additionally, oil prices are under pressure from anticipated increases in global supply.

The prospect of a peace agreement between Russia and Ukraine has contributed to this decline, as the potential lifting of Russian sanctions could enhance oil production. In a related matter, the United States and Ukraine have reportedly reached a preliminary agreement on a minerals deal, which is considered vital for securing Washington's backing, with President Trump seeking a prompt resolution to the conflict with Russia. In Iraq, the Kurdistan regional government has successfully negotiated with the federal oil ministry to recommence Kurdish crude exports, although the resumption is contingent upon Turkey's approval. The pipeline has been inactive since March 2023, following a ruling by the International Chamber of Commerce (ICC) that mandated Turkey to compensate Baghdad $1.5 billion for unauthorized exports conducted between 2014 and 2018.