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Oil prices declined on Wednesday after U.S. President Donald Trump said Washington had reached an agreement to import around $2 billion worth of Venezuelan crude, a move expected to increase supply to the world’s largest oil-consuming economy.
By 05:50 GMT, Brent crude futures were down 1.3% at $59.89 per barrel, while West Texas Intermediate (WTI) slipped 1.7% to $56.13 per barrel. Both benchmarks extended losses of more than $1 from the previous session, as traders continued to price in expectations of ample global supply in 2026.
Under the reported arrangement, some cargoes originally destined for China could be rerouted to the United States, with Venezuela potentially seeking to unload millions of barrels currently stored in tankers and facilities to avoid further escalation with Washington. The agreement follows a weekend operation in which U.S. forces captured Venezuelan President Nicolás Maduro, after Trump warned the country to open its energy sector to U.S. firms or face deeper intervention.
Analysts said the deal is likely to reinforce downward pressure on prices in an already oversupplied market, with Venezuelan crude expected to deepen the imbalance.
According to Yang An of Haitong Futures, increased Venezuelan shipments to the U.S. will “disrupt the U.S. market first and further widen the global surplus.” Analysts at Morgan Stanley estimate the oil market could see an excess of up to 3 million barrels per day in the first half of 2026, driven by weak demand growth and rising production from both OPEC and non-OPEC suppliers.
However, research firm BMI, a unit of Fitch Solutions, noted that a surge in low-cost Venezuelan output could discourage capacity expansions elsewhere, particularly in higher-cost production regions.
Venezuela’s flagship Merey crude is currently being sold at roughly $22 per barrel below Brent for deliveries at the country’s ports, underscoring the steep discount at which the oil is entering global markets.
