TOKYO — Oil prices tumbled and Asian stocks wobbled Wednesday after U.S. President Donald Trump said Washington had reached a deal for Venezuela to ship up to $2 billion worth of crude to the United States and China announced new export curbs aimed at Japan. Traders said the prospect of more supply hitting an already well-supplied market weighed on oil prices, while the export controls revived concerns about fragile supply chains for critical materials, Jan. 7, 2026.
Oil prices slide as Venezuelan barrels head toward the U.S. market
Brent crude fell 81 cents, or 1.3%, to $59.89 a barrel and U.S. West Texas Intermediate dropped $1, or 1.7%, to $56.13 in early Asian trading, according to a Reuters market report.
Trump said Venezuela would “turn over” 30 million to 50 million barrels of sanctioned crude to be sold at market prices, with U.S. Energy Secretary Chris Wright tasked with executing the plan. Analysts said the deal adds to expectations of ample supply in 2026; Morgan Stanley has estimated a potential surplus of as much as 3 million barrels per day in the first half of the year if demand stays soft and output rises.
Venezuela’s flagship Merey crude has been trading at about a $22-a-barrel discount to Brent at Venezuelan ports, a markdown that can appeal to U.S. Gulf Coast refiners. Yang An, an analyst at Haitong Futures, told Reuters the shift could deepen global oversupply and keep oil prices under pressure.
The U.S. approach to Venezuelan crude has shifted repeatedly with politics. In October 2023, Washington broadly eased some oil sanctions after an election-related agreement in Venezuela and issued a time-limited license for production and exports, Reuters reported at the time.
Asian stocks wobble as China–Japan export curbs widen
Regional equities turned cautious as the new trade friction spread. Japan’s Nikkei fell 1.1% and the MSCI index of Asia-Pacific shares outside Japan slid 0.6% in early trade, according to Reuters’ global markets wrap.
China’s commerce ministry said it was banning exports of dual-use items to Japan for military end uses, including some rare earth elements used in drones and chips. Japan’s foreign ministry said it strongly protested and demanded China withdraw the measure, calling it “absolutely unacceptable and deeply regrettable,” according to a Reuters report on the ban.
The latest move builds on years of tightening technology controls between the two countries. Japan said in 2023 it would restrict exports of certain chipmaking tools as it aligned with U.S. efforts to limit China’s access to advanced technology, Reuters reported when the plan was announced.
For investors, lower oil prices can ease inflation pressure, but rising geopolitical uncertainty can also keep risk appetite fragile. Markets were watching upcoming U.S. labor data for signals on the path of Federal Reserve rates, another key driver for oil prices and equities.
