British motorists could be impacted by President Donald Trump’s potential military intervention in South America, as it may send the price of oil spiralling.
Experts are warning that drivers could face a knock-on effect if US President Donald Trump calls for military action in Venezuela.
President Trump has continually hinted at taking action against Venezuela over claims its government is not doing enough to stop the spread of drugs to the United States.
Posting on social media site Truth Social, President Trump announced that the airspace above Venezuela would be “closed in its entirety”, noting that the warning was for “all airlines, pilots, drug dealers and human traffickers”.
The 47th President has also hinted that “land action” against Venezuela would take place in the near future in a bid to curb drug trafficking.
If greater military action were to occur, analysts have warned that military action could lead to the price of diesel soaring around the world.
The Telegraph reports that Venezuela has high levels of “heavy sour” crude oil, which is instrumental in the production of diesel and could dramatically impact the price of fuel.
Cyril Widdershoven, an analyst at the think tank Strategy International Cyprus, has warned that there is less heavy sour product, despite an oversupply of oil.
Diesel drivers could face high fuel costs if President Donald Trump threatens military action against Venezuela
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PA/REUTERS
The expert said: “Venezuela’s one million to 1.1 million barrels per day of heavy-sour output are crucial for US and Asian refineries. Any disruption could spike Brent and diesel prices.”
Estimates suggest that heavy refiners may have to pay as much as $15 (£11.36) extra per barrel if the US were to launch action against Venezuela.
This could also result in a rise in demand for additional supplies from Saudi Arabia and the United Arab Emirates, further impacting costs.
At present, diesel drivers are paying an average of 146.23p per litre for diesel, although RAC Fuel Watch does not anticipate any further changes to the price of fuel.
The price of diesel peaked in June and July 2022, when costs soared to around £2 per litre, with many attributing this to the Russian invasion of Ukraine significantly impacting oil prices.
Venezuela has called on the Organisation of Petroleum Exporting Countries (OPEC) to counter the threat of potential US action.
President Nicolas Maduro said the US were launching “growing and illegal threats” against the nation, and accused Trump of trying to “seize” Venezuela’s oil reserves.
While Venezuela is home to the world’s largest proven oil reserves, the South American country has been hamstrung by sanctions imposed by President Trump’s first presidency.
The US Navy USS Gerald R. Ford aircraft carrier has been positioned near Venezuela in an escalation of tensions between the two countries
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REUTERS
Venezuela is estimated to have 303 billion barrels of crude oil reserves, but exported just over $4billion (£3billion) worth of fuel in 2023.
In comparison, Canada, which has just over half of Venezuela’s total crude oil reserves, exported $107billion (£81.1billion) worth.
The US Government has launched airstrikes against boats it claims are transporting drugs, although the actions have been condemned by human rights advocates.
They argue that the airstrikes violate international law and could constitute extrajudicial killings against people who have not been given the opportunity for a fair trial.