Oil prices spike on concerns over global supply cuts

Oil prices jumped on Wednesday on escalating fears of global supply cuts. The upswing came after US President Donald Trump threatened to impose tariffs on countries importing fuel from Venezuela. Reuters reports that a faster drawdown of energy inventories in America has also contributed to bullish trend in global markets.

On Monday, President Trump signed an executive order authorizing his administration to impose a 25% blanket duty on imports from any nation that buys Venezuelan crude oil and gas. He went on to cite the 1977 International Emergency Economic Powers Act to explain why. 

Oil is Venezuela's primary export, with China — already subject to US import tariffs — being its largest purchaser. 

In addition, American authorities ordered Chevron Corporation to cease all fuel activities in Venezuela by May 27, as stated by Reuters. ANZ experts predict that revoking Chevron's license to develop the field could significantly reduce the country's oil production, with projections suggesting a drop of around 200,000 barrels a day.