Trump announces tariffs on Venezuela oil buyers; prices spike
President Donald Trump announced on Monday his intention to impose 25% tariffs on imports from countries purchasing oil and gas from Venezuela. This decision prompted an almost immediate reaction, as the price of oil on global markets significantly increased.
In a Monday post on the Truth Social platform, President Trump stated that "Venezuela has been very hostile to the United States and the Freedoms which we espouse."
"Any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country," stated the U.S. president.
He announced that the new tariffs will take effect on April 2nd, which he called "liberation day"—the same day he plans to announce a series of other reciprocal tariffs on various countries.
The market reacts to the announcements. Oil prices rise
The market reacted to Trump's new plans. West Texas Intermediate and Brent oil contracts rose by 1.2%, reaching $69.08 and $73.01 per barrel, respectively.
Trump also accused Venezuela of "purposefully and deceitfully [sending] to the United States, undercover, tens of thousands of high level, and other, criminals," including gang members from groups like Tren de Aragua, although he provided no evidence to support these claims.
The significance of Venezuelan oil for the American economy
Venezuela was one of the main foreign suppliers of oil to the United States last year. According to Commerce Department data, the U.S. purchased oil and gas worth $5.6 billion from Venezuela in 2024. This increase in supply occurred after the Biden administration temporarily lifted sanctions on Venezuelan oil in 2023, although they were reinstated in April 2024.
Despite the significant increase during this short period, Venezuelan oil and gas supplies were much smaller than imports from Canada, the primary foreign source of oil for the U.S. Canada exported oil and gas worth $106 billion to the United States last year, accounting for 60% of total imports of these resources, while Venezuela accounted for just 3%.
Before Monday's announcement, Trump was already preparing to limit access to Venezuelan oil by revoking Chevron's license for a joint extraction venture in that country. However, after meeting with Chevron CEO Mike Wirth and other oil industry executives last week, Trump is now considering extending their license, according to an industry source.
Political context and the issue of deportation
The decision to limit Venezuelan oil exports, set to take effect on April 3rd, was presented by the Trump administration in part as a form of punishment for Venezuela's reluctance to accept deported migrants accused of belonging to the notorious Tren de Aragua gang.
Since then, Venezuela has reached an agreement to resume repatriation flights from the U.S., receiving 200 deported individuals on Monday. Some relatives of the deported told CNN that their family members were not involved in any criminal activity, and the administration provided very little evidence to counter such claims.
The announcement of new tariffs on countries purchasing Venezuelan oil comes after reports that Trump intends to delay previously announced tariffs, including 25% fees on imports of pharmaceuticals, cars, and timber. These tariffs were set to take effect on April 2nd, the same day Trump announced the new tariffs on countries buying oil from Venezuela.
