U.S. diplomats have less than 72 hours to leave Venezuela as geopolitical tensions build between the U.S. and President Nicolas Maduro. The skirmish could hit crude oil prices short term, if Maduro does not cede power to opposition leader Juan Guaido, who declared himself president at an opposition-controlled National Assembly on Jan. 23.
The U.S. administration supports Guaido and could threaten political sanctions against the country unless Maduro relinquishes his role. Diplomats there plan to stay put unless Guaido asks them to leave.
President Donald Trump and Vice President Mike Pence unleashed several tweets and a video calling the incumbent a dictator and encouraging the people of Venezuela to rally against him.
Trump tweeted Jan. 23:
Juan Guaido and Nicolas Maduro both claim to be president. Maduro has control of the military, which oversees the oil industry and key sea ports that import food and basic needs. Guaido, elected president of Venezuela's National Assembly on Jan. 5, has offered military members amnesty if they switch sides.
The South American OPEC country has the largest crude reserves in the world and is a major supplier to U.S. refiners, but suffers from sky-high inflation and food shortages. Investors expect a near-term shortage of crude for some U.S. refiners if Maduro maintains power, but see a windfall if Guaido succeeds.
Oil prices pushed higher on Thursday, supported by the turmoil in Venezuela, after briefly dipping on government data showing U.S. crude stockpiles surged higher last week.
U.S. commercial crude stockpiles rose by 8 million barrels in the week through Jan. 18, the U.S. Energy Information Administration said on Thursday.
Crude futures drew support from a U.S. threat of sanctions on Venezuela, though renewed concerns about the global economic outlook capped gains throughout much of Thursday's session.
Brent crude futures were up 8 cents at $61.22 a barrel around 11:45 a.m. ET (1645 GMT), while U.S. West Texas Intermediate futures were up 52 cents, or 1 percent, at $53.14.