Oil Jumps 2.6% as U.S. Seizes Venezuelan Tankers
Crude prices surge after the Coast Guard intercepts oil tankers off Venezuela, escalating Trump's blockade of sanctioned shipments.
The Trump administration is backing up its Venezuela blockade with action.
U.S. Coast Guard vessels intercepted the Centuries tanker in the Caribbean on Saturday, boarding a ship carrying up to 2 million barrels of Venezuelan crude. By Sunday, American forces were pursuing a second vessel, the Bella 1, en route to Venezuela. It's the third such operation this month.
West Texas Intermediate crude rose $1.49, or 2.6%, to settle at $58.01. Brent gained $1.60, or 2.7%, to $62.07.
The Blockade Takes Shape
President Trump announced the blockade last week, targeting tankers evading U.S. sanctions on Venezuelan oil. The operations are now extending to non-sanctioned vessels—the Centuries wasn't under formal restrictions, making Saturday's boarding a meaningful escalation.
"The market is waking up to the fact that the Trump administration is taking a hardline approach to Venezuelan oil trade," said June Goh, senior oil analyst at Sparta Commodities.
Supply at Risk
Venezuela exports roughly 600,000 barrels per day, with the majority—around 68%—going to China. Another 160,000 bpd flows to U.S. refiners, particularly those configured for heavy crude along the Gulf Coast.
In the context of global supply, Venezuelan output represents about 1% of world production. That's not enough to spike prices dramatically, but enforcement disruptions add friction and uncertainty. The Coast Guard operations signal that tankers can't assume safe passage.
The Dark Fleet Problem
Much of Venezuela's oil moves through what analysts call the "dark fleet"—aging tankers using deceptive practices to evade tracking. These vessels also transport sanctioned Russian and Iranian crude. The Trump administration's willingness to interdict ships physically, rather than simply designating them for sanctions, changes the risk calculus for operators.
For China, the blockade creates diplomatic complications alongside supply concerns. Beijing has been the primary buyer of sanctioned Venezuelan crude, and any sustained disruption would require sourcing alternatives.
Positioning
Energy stocks outperformed Monday's broader market rally, with the sector leading the S&P 500 higher. For traders, the question is whether the blockade represents a sustained enforcement posture or a temporary escalation. The answer depends on how far Trump is willing to push—and whether Venezuela finds workarounds.