Venuzuela's state oil company PDVSA is refusing to sell crude to ExxonMobil following a legal dispute between the companies.
But crude prices held steady in world markets in morning trading, dropping four cents in the US to $92.74 (£47.35) a barrel, while London Brent crude lost one cent to $92.85 (£47.40).
The move to cut supplies follows legal action brought against Venezuela's government by Exxon, which wants compensation for the nationalization of an oil project in the country.
PDVSA said it was "paralyzing" supplies as retaliation for a court order obtained in the US by Exxon, freezing assets relating to the project worth $12 billion (£6.1 billion).
President Hugo Chavez has claimed national sovereignty over the oil business and has threatened to stop the oil supply to the US should Exxon take legal action to embargo PDVSA assets.
The head of state has blamed the US for "organizing an international movement in this hemisphere" as part of a wider plot to destabilize the country.
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