Oil slides as Trump signals Venezuelan crude flows to the U.S.

Oil prices moved lower on Wednesday after U.S. President Donald Trump said Washington had struck an agreement that would allow up to $2 billion of Venezuelan crude to be imported into the United States, a development expected to add to supply in the world’s biggest oil-consuming market.

Brent crude futures were down 64 cents, or 1.1%, at $60.06 a barrel by 05:50 GMT. U.S. West Texas Intermediate crude fell 82 cents, or 1.4%, to $56.44 a barrel. Both benchmarks extended losses of more than $1 from the previous session, reflecting expectations that global supply will remain plentiful this year.

Market participants noted that the agreement could initially force shipments originally destined for China to be redirected. Venezuela is also thought to be seeking to clear millions of barrels currently held in tankers and storage facilities, partly to avoid further escalation with the United States.

Trump had earlier warned that Venezuela must open its oil sector to U.S. companies or face the risk of intensified military action. Shortly thereafter, U.S. forces captured Venezuelan President Nicolás Maduro over the weekend.

Analysts broadly expect the deal to weigh on prices in an already well-supplied market. “Venezuela’s oil exports to the United States have first and foremost disrupted the U.S. market, which will also deepen the global oversupply,” said Yang An, an analyst at Haitong Futures.

Analysts at Morgan Stanley estimate that the oil market could move into a surplus of as much as 3 million barrels per day in the first half of 2026, citing weak demand growth last year alongside rising output from both OPEC and non-OPEC producers.

That said, analysts at BMI, part of Fitch Solutions, said in a note on Wednesday that an influx of higher volumes of low-cost Venezuelan crude could slow investment and capacity expansion in the U.S. and other producing regions.

Venezuela has recently been selling its flagship Merey crude at a steep discount of around $22 per barrel to Brent for delivery at its ports. “That raises the expected price of oil over the medium term, especially if the Venezuelan regime survives,” the BMI analysts added.