Oil prices rose on Wednesday, supported by a larger-than-expected drop in US crude and fuel inventories, as well as concerns over tighter global supply following Washington's threats of tariffs on buyers of Venezuelan crude.

Brent crude futures settled up US$0.77 or 1.05% at US$73.79 per barrel, while US West Texas Intermediate (WTI) crude rose US$0.65 or 0.94% to US$69.65 per barrel. At session highs, both benchmarks gained more than US$1 per barrel.

The US Energy Information Administration (EIA) reported a 3.3-million-barrel drop in US crude inventories last week to 433.6 million barrels, surpassing analysts' expectations of a 956,000-barrel decline.

Adding to supply concerns, trade in Venezuelan oil to China—its top buyer—was disrupted after US President Donald Trump announced potential 25% tariffs on countries importing crude from Caracas.

Barclays analysts warned that this could result in production shutdowns of up to 400,000 barrels per day (bpd) and a revenue loss of US$4.9 billion for Venezuela.

Meanwhile, a US-brokered truce between Russia and Ukraine on sea and energy targets tempered oil price gains, with analysts expecting more Russian crude to enter the market.

Analysts believe China and India may shift towards purchasing more Russian oil rather than risk Venezuelan imports, further shaping the global energy trade landscape.