Investing.com-- Oil prices rose in Asian trading on Wednesday, set for their sixth consecutive session of gains, after data showed that U.S. crude stockpiles fell sharply below forecasts, but gains were limited as traders cautiously assessed Russia-Ukraine peace talks.

Brent Oil Futures expiring in May were trading 0.4% higher at $73.29 per barrel as of 21:27 ET (01:27 GMT), while West Texas Intermediate (WTI) crude futures rose 0.4% to $68.84 per barrel.

Both contracts ended slightly higher on Tuesday after U.S. President Donald Trump threatened to impose 25% tariffs on countries purchasing oil from Venezuela.

Gains were limited on Wednesday as the U.S. brokered separate agreements with Ukraine and Russia to halt attacks at sea and on energy infrastructure.

US crude stocks drop sharply, Venezuela tariffs support prices

The American Petroleum Institute (API) reported a significant drawdown of 4.6 million barrels in U.S. crude oil inventories for the week ending March 21, 2025, surpassing analysts’ expectations of a 2.5 million barrel decline.

The substantial drawdown in crude inventories indicates a strengthening in U.S. petroleum demand.

Market participants will closely monitor upcoming reports from the U.S. Energy Information Administration (EIA) for further confirmation of these trends and to assess their potential impact on future oil prices.

Oil was further supported by President Trump’s Monday announcement, threatening to impose 25% tariffs on all imports from countries that purchase oil or gas from Venezuela, effective April 2.

This measure aimed to exert economic pressure on the Venezuelan government, led by President Nicolás Maduro, which the U.S. administration accuses of hostile actions and undermining democratic institutions.

Venezuela’s oil exports are a significant component of its economy, with China being its largest oil buyer.

The announcement has raised concerns about potential disruptions in global oil supply chains and has contributed to a modest increase in oil prices.

Russia-Ukraine truce talks in focus; limit gains

The U.S. brokered separate agreements on Tuesday with Ukraine and Russia to halt attacks at sea and on energy infrastructure.

As part of these deals, Washington committed to advocating for the lifting of certain sanctions on Moscow, particularly those affecting Russian agriculture and fertilizer exports.

If this extends to energy-related sanctions, Russia may be able to increase its oil sales on the global market. An influx of Russian crude would add to the overall supply, potentially driving prices lower.

Another key factor is the reduced geopolitical risk premium. Oil prices often rise when conflicts threaten energy supply chains, particularly in regions with major energy exports like Russia. A pause in hostilities, even if temporary, diminishes concerns over supply disruptions.