- Oil climbs on Venezuelan “secondary” tariff threat
- The WTI prompt-month contract is up 47c to $69.58/Bbl (7:45 AM CT)
- A 25% tariff would be applied to trade with the US if other countries import oil and gas from Venezuela
- The measure is being interpreted as a new form of economic pressure, with a particular focus on China, the primary buyer of Venezuelan crude through unofficial channels
- The tariff would increase costs and restrict supply for smaller Chinese refiners that depend on Venezuelan barrels for part of their feedstock
- US crude futures are trading just below $70/Bbl, a level last seen at the start of the month
- Brent $85, $100 calls spark options surge (Bloomberg)
- Brent options volume hit the highest level since early January as the Trump administration ramps up sanctions on oil-producing nations, with trading led by June $100 calls and a sizable August/September $85 call spread
- Brent and WTI skews are now the least bearish since February 11 and February 13, respectively
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