Oil prices have fallen sharply amid expectations of a surge in supply as US president Donald Trump said Venezuela would relinquish up to 50 million barrels of Brent crude to the US.
Crude dropped below $60 (£44.50) a barrel at one stage on Wednesday after Mr Trump said “interim authorities” in Venezuela would be providing 30 million to 50 million barrels of “high quality” oil to the US at its market price – thought to be worth close to $2bn.
Mr Trump posted on Truth Social that the oil “will be taken by storage ships, and brought directly to unloading docks in the United States”.
He said the money would be controlled by him as president, but would be used to benefit the people of Venezuela and the US.
It follows the US military operation that captured the Venezuelan leader Nicolas Maduro and flew him to the US to face drug charges.
It is understood the White House is organising an Oval Office meeting on Friday with oil company bosses over Venezuela, with representatives of Exxon, Chevron and ConocoPhillips set to attend.
The oil price declines come in response to market fears of a supply glut in crude, with worldwide oil supplies expected to exceed demand in 2026.
Kathleen Brooks, research director at XTB, said: “Although the oil price was initially able to absorb the Venezuela news, today’s move lower is a sign that the oil price continues to be sensitive to any shift in supply dynamics.”
The crude price falls saw London-listed blue chips BP and Shell suffer early session declines on Wednesday, down 3 per cent and 2 per cent respectively.
Richard Hunter, head of markets at Interactive Investor, said: “A further dip in the oil price on concerns of potential oversupply as a result of developments in Venezuela weighed on BP and Shell, providing a headwind which dragged the FTSE 100 back from the record closing high set yesterday.”
The wider FTSE 100 was 0.5 per cent or 50 points lower at 10072.5 in morning trade, having soared to new highs on Tuesday after closing above the 10,000 level for the first time on Monday.
