(Bloomberg) — Supply Lines is a daily newsletter that tracks global trade. Sign up here.
Most Read from Bloomberg
President Donald Trump on Monday issued an order allowing a 25% tariff to be imposed on any nation purchasing oil and gas from Venezuela, ratcheting up his dispute with the Latin American country over immigration with a move that risks roiling the global energy trade.
The move aims to cut a major source of revenue for the regime of Nicolás Maduro in Caracas while also putting further pressure on China, which is a major purchaser of Venezuelan crude and already in the cross hairs for 20% tariffs under Trump. The US, meanwhile, is also a core buyer of Venezuelan oil, and Texas-based Chevron Corp. is a key producer.
Trump’s executive order authorizes the State Department to issue 25% tariffs, in addition to any others already in place or threatened, on all goods imported to the US “from any country that imports Venezuelan oil, whether directly from Venezuela or indirectly through third parties.”
Yet the order as written may also give Secretary of State Marco Rubio some flexibility in determining which nations will be subject to the tariff, and which will not. It specifies that he has authorization “to determine at his discretion whether the tariff” will be imposed on those importing countries.
The order takes effect April 2, the same day Trump’s administration is expected to unveil a wider array of levies targeting multiple countries, adding yet another layer to the overlapping duties that have rattled trade partners and risk gumming up the global economy. Trump told reporters earlier Monday the levies would be “on top of existing tariffs.”
US crude futures rose as much as 1.5% after Trump’s first social media post announcing the tariffs, before paring gains to about 1.2% to trade at $69.07 a barrel as of 2:45 p.m. in New York. Prices have come under pressure in recent weeks due to growing worries about oversupply and a shaky US economic outlook. Meanwhile, Venezuela sovereign bonds slipped across the curve.
Trump referred to the new charges as “secondary tariffs,” a potentially novel use of the trade tool similar to so-called secondary sanctions imposed on firms or people doing business with targeted entities. Trump has ramped up scrutiny and sanctions on Venezuela since returning to the White House, reversing some easing under President Joe Biden.
“Any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country. All documentation will be signed and registered, and the Tariff will take place on April 2nd, 2025, LIBERATION DAY IN AMERICA,” Trump wrote Monday on Truth Social.
“Venezuela has been very hostile to the United States and the Freedoms which we espouse,” Trump wrote.
In a statement released after Trump’s announcement, the government of Maduro rejected the measure, calling it “arbitrary, illegal, and desperate.” “Far from affecting our resolve, it confirms the resounding failure of all the sanctions imposed against our country,” adding that it will take action before international organizations.
The renewed pressure from Washington also comes as exports of Venezuelan crude had risen to a five-year high in February, before the Trump administration said it was forcing Chevron to wind down its operations in the country.
The US Treasury Department on Monday granted Chevron more time to conclude operations with Venezuela’s state-owned Petroleos de Venezuela SA, extending the deadline to May 27 from April 3. A spokesperson for Chevron didn’t immediately comment on the extension.
A senior administration official said that the extension was to allow fulfillment of pre-orders and predicated on not allowing additional cash payments to Maduro’s government.
Trump discussed the Venezuela situation last Wednesday in a meeting with more than a dozen oil executives, including Chevron Chief Executive Officer Mike Wirth, according to people familiar with the situation. The issue was framed within the broader context of global oil supply, as well as the specific point that US Gulf Coast refineries are optimized to use the types of heavy crude imported from Venezuela and Canada, they said.
Slapping tariffs on buyers of Venezuelan crude was also discussed as a way to deter other buyers, especially China, from taking the country’s oil exports, particularly if Chevron shuttered operations and US imports stopped, said the people, who asked not to be identified detailing private discussions.
The largest buyers of Venezuelan oil include US refiners, which depend on the Latin American nation’s heavy grade of crude, along with China, Cuba and companies in Europe and India. As with other recent US actions, the order specifies that if China were to be subject to the tariff it would include Hong Kong and Macau as well as mainland China.
The US refiners include Valero Energy Corp, Phillips 66, PBF Energy Inc. and Chevron’s Pascagoula facility in Mississippi.
Trump didn’t detail any plans to put tariffs on sales to the US, implying that crude imports from the country could continue relatively unfettered. Curbing Venezuelan barrels at a time when Mexican and Canadian crude flows to the US have already slowed may prop up prices.
The move escalates tensions with the South American nation ruled by socialist leader Maduro. Trump has sought to crack down on the Venezuela—based Tren de Aragua gang, including with a series of deportations under a little used 18th century law to a notorious El Salvadoran prison. A federal judge ruled Monday the migrants must be allowed to challenge the deportations in court.
Trump announced the decision after Venezuela resumed accepting deportation flights from the US, which Maduro’s government briefly halted. But Trump said “Venezuela has purposefully and deceitfully sent to the United States, undercover, tens of thousands of high level, and other, criminals, many of whom are murderers and people of a very violent nature” including members of Tren de Aragua.
Venezuela had the world’s largest proven crude oil reserves in 2023 with approximately 303 billion barrels, accounting for approximately 17% of global reserves, according to US government data. Despite the sizable reserves, Venezuela produced about 875,000 barrels a day in 2024, according to OPEC data, or about 0.9% of total global oil production in 2024.
–With assistance from Hadriana Lowenkron, Zijia Song, Derek Wallbank and John Harney.
(Updates throughout with details from Trump executive action)
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.
