In a major escalation of economic pressure, President Donald Trump announced on Monday that any country purchasing oil and gas from Venezuela would face a 25% tariff on all trade with the United States.
The policy is set to take effect on April 2, as Trump revealed on his social media platform, Truth Social.
This bold move serves as both a financial warning to foreign governments and a reflection of the ongoing tensions between Washington and Venezuela.
Market reaction
Global oil markets reacted immediately to the announcement.
As of 10:54 a.m. ET, US crude oil prices had risen by 77 cents, or 1.13%, to $69.05 per barrel, while Brent crude, the global benchmark, gained 73 cents, or 1.01%, to reach $72.89 per barrel.
Analysts warn that the new tariff could intensify crude oil price fluctuations, as Venezuelan oil has long operated under US sanctions.
The move may also prompt major oil-importing nations to reconsider their energy partnerships and sourcing strategies.
Meanwhile, the Trump administration recently indicated a potential shift in its Venezuela policy.
On March 20, officials stated they were considering extending Chevron’s license to operate in Venezuela, despite previously ordering the company to wind down operations by April 3.
Since 2022, Chevron has been responsible for exporting approximately 200,000 barrels per day of Venezuelan crude—roughly a quarter of the country’s total output, according to Reuters.
‘How would the US collect this tariff from a third party?’
Economist Aldo Contreras, speaking to Invezz, questioned the feasibility of imposing a 25% tariff on nations purchasing Venezuelan oil, particularly those outside US jurisdiction.
“How would the United States collect this tariff from a third party, especially when those transactions occur outside US legal authority?” he asked, arguing that enforcement could prove logistically impractical.
Contreras also noted that if US companies like Chevron are exempt from the policy, they could end up shouldering the tariff burden themselves.
“If Chevron is required to pay the 25% levy on its operations, it would fundamentally alter its cost structure,” he explained.
Regarding foreign buyers, Contreras highlighted a critical loophole:
“If Europe purchases oil directly from Venezuela without US involvement, I don’t see how the US could enforce a 25% tariff on that transaction.”
This raises serious questions about the policy’s global effectiveness.
If the tariff is implemented successfully, Venezuela may have to adjust its pricing strategy to stay competitive.
“To offset the tariff, Venezuela might be forced to discount its oil by 25%, which would significantly impact its revenues,” Contreras warned.
“Instead of risking $5 billion in potential revenue with Chevron, they could be looking at losses of only $1.25 billion—marking a major financial setback.”
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