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The big unknown, however, is how, and if, the blockade will actually be enforced.
In a post on TruthSocial, Donald Trump announced that he have ordered a blockade of sanctioned oil tankers entering and leaving Venezuelan ports.
Trump did not disclose how the blockade would be enforced, but he claims that Venezuela is “completely surrounded”
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Following the announcement, oil prices went up 1.5% according to Reuters, but that number could increase significantly in the time to come.
The big unknown
Speaking to CNBC, Josh Young from Bison Interests, said that Venezuela is responsible for roughly 2 % of global oil exports (but only 1 % of global oil production), and if a percentage is taken off of the global market, it can have a “meaningful” impact on the global prices.
To him, the big unknown at the moment is how the U.S. will actually enforce the announced blockade, and how Venezuela responds.
But if the U.S. do in fact impose the blockade announced by Trump, it could have a meaningful impact on oil prices.
According to CNBC, some analysts suggest that oil prices will go up by 2-3 dollars, but Young fears it might be more.
“Maybe it could be closer to 5 to 7 Dollars, but we’ll see,” he said before adding that there is a lot of uncertainty regarding the actual enforcement of the announced blockade.
Actual policies or venting?
Young notes that the American President posts a lot of things on social media, and that it takes time to see, how many of the alleged changes, that actually translates into policies, and how many of them are Trump “venting”, as Young puts it.
As of now, it is unclear how many tankers would be affected by the blockade.
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Sources: TruthSocial, Reuters, CNBC
