What it means for Maduro and oil markets – DW – 12/17/2025 | EUROtoday

Donald Trump’s announcement of a “total and complete blockade” of sanctioned oil tankers travelling to and from Venezuela has raised questions concerning the financial penalties for the regime of leftist president Nicolas Maduro.

Trump has made oil a central goal in his ongoing marketing campaign in opposition to Maduro, which was sparked by the US president’s claims that Maduro was guilty for the unlawful movement of each migrants and medicines to the US from Venezuela.

The fragile Venezuelan economic system is exceptionally depending on oil. If Trump’s blockade risk seems to be extra than simply phrases, it could have important implications for Caracas.

What precisely has Trump threatened?

In a Truth Social submit on Tuesday (Dec. 16), Trump stated Venezuela “is completely surrounded by the largest Armada ever assembled in the History of South America” earlier than saying he was ordering the blockade.

Since late August, the US has been organising a serious naval build-up throughout the Caribbean Sea — one of many largest US naval deployments within the area for the reason that so-called Cuban missile disaster in 1962.

Up to a dozen US army vessels have been working within the Caribbean in current weeks, together with plane carriers, guided-missile destroyers and amphibious assault ships.

How a blockade will work

A naval blockade is a army operation the place warships encircle a selected shoreline with a view to forestall maritime site visitors from coming into or leaving.

Trump’s risk specifies “all sanctioned oil tankers going into, and out of, Venezuela.”

Last week, US forces seized an oil tanker off the coast of Venezuela. US Attorney General Pam Bondi stated the tanker had been transporting sanctioned oil from Venezuela and Iran. Caracas decried the seizure as an act of “international piracy.”

If efficiently and totally applied, the naval blockade threatened by Trump would dramatically cut back the quantity of oil popping out of Venezuela. However, it isn’t but clear precisely which tankers can be affected or exactly how a blockade can be carried out.

As is usually the case with Trump’s social media pledges, there are additionally authorized doubts. Elena Chachko, a global regulation scholar from UC Berkeley Law School within the US, informed information company Reuters {that a} blockade would increase “serious questions on both the domestic law front and international law front.”

While Venezuela’s state oil firm, PDVSA, is closely sanctioned and lots of vessels which choose up oil there are particularly sanctioned, others which transport oil from the nation usually are not. US oil large Chevron, for instance, was given particular licences by the Biden administration in 2022 to renew Venezuelan oil exports. The concept on the time was that softening Venezuelan sanctions would ease wider oil market pressures within the wake of Russia’s invasion of Ukraine.

But in October this yr, the Trump administration gave Chevron recent authorization to supply oil in Venezuela argueing the US firm was an important associate for Caracas.

How US sanction already hit

Venezuela is sort of utterly depending on oil for state earnings. Crude oil and associated merchandise similar to petrochemicals account for greater than 90% of Venezuela’s export revenues. They maintain Maduro’s closely sanctioned and remoted authorities functioning and in energy.

Experts say that if there have been extra cargo seizures, or if Trump have been to comply with by on the blockade, a lot of Venezuela’s oil would stay within the nation, whereas that which makes its approach out would doubtless be bought at a steep low cost.

There is already proof that the current seizure of a Venezuelan tanker by US forces and the specter of additional measures is having an influence.

According to information analytics agency S&P Global Commodities Insights, the variety of oil tankers travelling to Venezuela has fallen sharply over the previous few weeks. The London, UK-based agency stated in a report on Tuesday that as of the week beginning December 14, there have been 17 tankers crusing to or round Venezuelan waters. That’s down from 24 vessels a month earlier.

The S&P report additionally famous that a number of sanctioned vessels at the moment “appear to be turning away” from Venezuelan waters and the broader Caribbean Sea following the US seizure of the tanker and subsequent sanction bulletins.

On December 11, the US sanctioned six transport corporations and 6 tankers which operated repeatedly in Venezuela’s oil sector, with extra sanctions doubtless within the coming weeks.

Could the Venezuelan economic system deal with the harm?

Given the extent of disaster the Venezuelan economic system has endured over the previous decade, few can predict what recent depths it might attain with out impacting Maduro’s grip on energy.

The nation’s oil output has already been in decline lately on account of sanctions, corruption and financial mismanagement. Venezuela has the world’s largest deposit of identified oil reserves however has more and more struggled to maximise revenues from it.

During the rule of Maduro’s predecessor, late Hugo Chavez, oil costs and revenues soared however they’ve fallen dramatically for greater than a decade. Whereas Caracas as soon as pulled in additional than $100 billion (€85.6 billion) a yr from oil, the determine is now nearer to $20 billion.

According to the International Monetary Fund (IMF)Venezuela’s economic system endured “the single largest economic collapse for a non-conflict country in almost half a century,” within the interval since Maduro took workplace in April 2013.

What about world oil markets?

Although oil costs jumped by greater than 1% on Wednesday, most analysts say Trump’s blockade risk on Venezuelan output has a restricted influence on world markets.

“Overall, export volumes from Venezuela are relatively small in the global supply share. With all eyes on the Russia-Ukraine discussions, the market is still under downside risk,” one oil dealer informed Reuters.

Muyu Xu, senior oil analyst at Brussles-based information analytics agency Kpler, informed Reuters that whereas Venezuelan oil manufacturing accounts for round 1% of world manufacturing, “most of it is concentrated on a small pool of Chinese buyers, and others in the US and Cuba.”

There are already expectations that the worldwide oil market will face oversupply subsequent yr.

Saad Rahim, chief economist of commodity-trading large, Trafigura, informed the Financial Times earlier this month that the oil market will face a “super glut” as a burst of recent provide collides with weak spot within the world economic system, and weighing on already falling costs for crude oil in 2026.

Edited by: Uwe Hessler