Oil prices experienced an increase of nearly a dollar during Asian trading hours on Thursday, following President Donald Trump’s announcement of a blockade on tankers entering and exiting Venezuela, while the majority of exports from the nation continued to be suspended. US West Texas Intermediate crude was up 98 cents, or 1.7 per cent, at $56.89 per barrel at 0120, after initially rising more than a dollar. Brent crude experienced an increase of 92 cents, reflecting a rise of 1.54 percent, reaching a price of $60.60 per barrel. On Tuesday, Trump issued an order to impose a blockade on all sanctioned oil tankers entering and exiting Venezuela, characterizing President Nicolas Maduro’s administration as a foreign terrorist organization. However, the specifics of enforcement remain ambiguous.

Sources and customs data indicated that a significant portion of Venezuelan exports remained on hold on Wednesday due to the blockade. This occurred despite the Venezuelan state oil company PDVSA having restarted the loading of crude and fuel cargoes after previously suspending operations as a result of a cyberattack. Chevron vessels continued their departures for the US, operating under a prior authorization from the US government. “While enforcement details remain unclear, the unexpected escalation in US pressure against the Maduro regime has sparked supply disruption concerns and triggered short covering in an oversold market,” noted market analyst Tony Sycamore.

Last week, the United States employed its Coast Guard to confiscate the supertanker Skipper in proximity to Venezuela, marking the inaugural US seizure of an oil cargo originating from Venezuela. Reports regarding the blockade led to an increase in oil prices exceeding 1 percent during Wednesday’s trading session, marking a recovery from five-year lows that had been influenced by advancements in Ukraine peace negotiations, which appeared to suggest a possible reduction in Russian sanctions.

Venezuelan crude constitutes approximately 1 percent of worldwide supplies. The majority of that is directed towards China; however, market sources indicate that subdued demand and an excess of crude in floating storage across Asia are constraining the market effects on the largest importer globally. In the UK, oil and gas major BP announced on Thursday the appointment of Meg O’Neill, currently the head of Australia’s Woodside Energy, as its CEO effective April 1. This move indicates the company’s commitment to advancing its strategic shift following a reduction in renewable initiatives to refocus on oil and gas earlier this year.