Oil prices continued to fall on January 7, as investors assessed comments by President Donald Trump saying the United States had reached an agreement to import crude oil from Venezuela worth up to USD 2 billion.
At the close of trading on January 7, Brent crude futures fell 74 cents, or 1.22%, to settle at USD 59.96 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped USD 1.14, or 2%, to USD 55.99 per barrel.
Both benchmark contracts had already declined by more than USD 1 in the previous session, amid market expectations that global oil supply would be relatively ample this year.
According to Reuters sources, the agreement between Washington and Caracas could initially result in oil cargoes that were originally destined for China being redirected.
Venezuela currently has millions of barrels of oil loaded onto tankers and stored in tanks but has been unable to export them since mid-December due to an export blockade imposed by Mr. Trump.
The blockade is part of a U.S. pressure campaign against the government of Venezuelan President Nicolás Maduro, which reached a peak when U.S. forces detained Mr. Maduro over the past weekend.
In a social media post on January 6, Mr. Trump said Venezuela would deliver between 30 million and 50 million barrels of oil to the United States.
“In the bigger picture, this volume is not that large,” said Ole Hvalbye, commodities analyst at SEB. “If you look at the total amount of oil currently held in the U.S. Strategic Petroleum Reserve (SPR), which stands at 413 million barrels, then compared with 30–50 million barrels, the figure is not really significant.”
Providing some support to oil prices, U.S. crude oil inventories fell by 3.8 million barrels to 419.1 million barrels in the week ending January 2, according to the U.S. Energy Information Administration (EIA). Previously, analysts had forecast an increase of 447,000 barrels.
By contrast, U.S. gasoline inventories rose by 7.7 million barrels, far exceeding the forecast increase of 3.2 million barrels in a Reuters poll.
Distillate inventories (including diesel and heating oil) also increased by 5.6 million barrels, well above expectations for a 2.1 million-barrel rise.
Analysts at Morgan Stanley estimate that the oil market could be oversupplied by as much as 3 million barrels per day in the first half of 2026, due to weak demand growth last year and rising supply from both OPEC and non-OPEC producers.
However, according to experts at BMI (a Fitch Solutions company), the prospect of Venezuela exporting large volumes of oil at low production costs could lead other countries — including the United States — to temporarily delay plans to expand oil production capacity.
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