Oil prices rose early on Wednesday in Asia due to concerns about reduced supplies following threats from U.S. President Donald Trump to impose tariffs on nations importing oil and gas from Venezuela. This was intensified by a larger-than-expected drop in U.S. crude inventories. Brent crude futures increased by 0.3% to $73.27 a barrel, and U.S. West Texas Intermediate crude futures went up by 0.4% to $69.28 a barrel.

President Trump's executive order allows for 25% tariffs on imports from any country purchasing Venezuelan oil under the 1977 International Emergency Economic Powers Act. Since China, a significant buyer of Venezuelan oil, is already facing U.S. import tariffs, this move could impact oil trade significantly.

In addition, there was an extension given until May 27 for U.S. oil producer Chevron to halt operations in Venezuela. If Chevron is forced to cease its operations in the country, it could lead to a reduction in daily production by around 200,000 barrels.

Furthermore, reports showed that U.S. crude inventories fell by 4.6 million barrels in the last week of March, as per data from the American Petroleum Institute. Analysts, who had anticipated a decline of 1 million barrels, are awaiting the official U.S. government data on crude inventories due on Wednesday.

Despite these factors supporting oil prices, the U.S. brokered agreements between Ukraine and Russia to halt attacks at sea and on energy facilities. As part of these agreements, Washington has suggested easing some sanctions against Moscow. Both Kyiv and Moscow have shown doubts about each other’s adherence to the deals, relying on U.S. enforcement.

In conclusion, oil prices surged due to concerns about supply disruptions and geopolitical tensions, which were partially offset by agreements between the U.S., Ukraine, and Russia.