Brent crude prices sank in volatile trading on Wednesday after U.S. President Donald Trump said Venezuela will supply tens of millions of barrels of oil to Washington.

Oil prices were nursing losses from earlier this week after the U.S.' incursion into Venezuela spurred bets on a broad lifting of sanctions against the country's oil industry. Such a move could release tens of millions of barrels of supply back into markets.

While heightened geopolitical uncertainty saw traders price in some risk premium, oil remained largely on the backfoot amid growing concerns over a supply glut in 2026. Oil prices notched their biggest annual drop in five years in 2025.

Brent crude futures had fallen by 0.5% to $60.36 a barrel while U.S. West Texas Intermediate crude decreased 1.0% to $56.54 a barrel.

Trump says Venezuela will send 30-50 million barrels of oil to the U.S.
Trump said in a social media post that Venezuela will turn over between 30 million and 50 million barrels of oil to the U.S.

"This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States," Trump said in a statement.

The development comes just days after U.S. forces captured Venezuelan President Nicolas Maduro. Trump later said that the U.S. was assuming temporary control of Venezuela and that Washington intended to open up the country's oil industry.

Oil had initially fallen after Maduro's capture, as markets feared that a lifting in U.S. sanctions against Venezuela will release vast amounts of crude back into the market.

But analysts warned that Venezuela's reopening may take longer than expected due to potential political instability and the country's aging energy infrastructure impeding production.

Data from maritime intelligence firm Kpler suggested that Venezuela's oil production was unlikely to rise in the near-term due to limited storage capacity in the country.

Russia-Ukraine ceasefire in focus; U.S. joins Kyiv guarantees.

Oil markets were also watching for any new developments in negotiations over a Russia-Ukraine ceasefire, after the U.S. on Tuesday backed a broad coalition of mainly European nations in vowing to provide security guarantees to Kyiv.

The U.S. pledge came at a Paris summit of mainly European countries to reassure Kyiv in the event of a ceasefire with Russia. Washington also offered to carry out ceasefire monitoring and verification, if a deal were to be reached.

But Moscow has so far shown little openness to reaching a ceasefire, as military action between Russia and Ukraine continued. The conflict is now set to enter its fifth consecutive year.

Still, any potential ceasefire between Russia and Ukraine stands to eventually result in the lifting of U.S. sanctions on Moscow, freeing up more oil supplies from the country. A ceasefire also presents a smaller risk premium for crude.

Source: Investing.com