Oil Prices Dip as Ukraine Declares Black Sea and Energy Ceasefire, U.S. Threatens Venezuelan Oil Tariffs

Oil prices took a slight tumble on Tuesday following a surprising announcement from Ukraine’s leadership, signaling an immediate truce with Russia that encompasses the Black Sea and energy infrastructure. Despite the dip, crude prices found some footing thanks to looming U.S. tariffs that could tighten global oil supply by targeting nations purchasing Venezuelan oil.

By mid-afternoon in New York, Brent crude futures had slipped 9 cents, a modest 0.12% drop, settling at $72.91 per barrel, while U.S. West Texas Intermediate crude fell 23 cents, or 0.33%, to $68.88.

The Ukrainian president hailed the ceasefire as a pivotal step, effective immediately, but didn’t shy away from pressing the U.S. for additional weapons and tougher sanctions on Russia should the agreement falter. Analysts suggest this truce could pave the way for easing sanctions on Russian oil, a prospect that might reshape global energy flows.

If this ceasefire holds, it could mean more Russian oil back in the mix. The U.S. also brokered deals with both nations to secure safe passage in the Black Sea and enforce a mutual ban on energy facility attacks, adding a layer of stability to the region.

Meanwhile, the U.S. stirred the pot with a bold threat: a 25% tariff on countries buying Venezuelan oil and gas. This move, which sent oil prices up over 1% the previous day, underscores concerns about shrinking supply. Venezuela, heavily reliant on oil exports, could see its production capacity erode further, especially as China—its top buyer—faces additional pressure from existing U.S. trade restrictions.

These tariffs are a backdoor sanction aimed at crippling Venezuela’s oil output and disrupting China’s refining network.

Adding fuel to the fire, the U.S. extended a deadline for a major American oil producer to exit Venezuela by late May, a decision that could slash the country’s output by roughly 200,000 barrels daily.

On the production front, the coalition of oil-rich nations, known for balancing global supply, is poised to boost output for a second straight month in May. Sources close to the group say this aligns with steady prices and efforts to rein in members who’ve overpumped in the past.

Elsewhere, fresh U.S. sanctions targeting Iranian oil exports and hints of upcoming automobile tariffs signal a broader strategy shift, though flexibility on some levies has calmed jittery markets—for now. Together, these developments paint a complex picture of a global oil market teetering between ceasefire-driven relief and tariff-fueled tension.