Oil prices rose on Wednesday as concerns over supply disruptions intensified amid U.S. efforts to curb Venezuelan and Iranian crude exports. A larger-than-expected decline in U.S. crude inventories also provided support.
Brent crude, the global benchmark, inched up 0.1% to $72.66 per barrel from its previous close of $72.59. Similarly, U.S. West Texas Intermediate (WTI) gained 0.12%, settling at $69.15 per barrel, compared to $69.07 in the prior session.
The upward momentum followed an executive order signed by U.S. President Donald Trump on Monday, imposing tariffs on countries importing Venezuelan oil. Starting April 2, a 25% tariff may be applied to goods imported into the U.S. from nations purchasing Venezuelan crude, either directly or indirectly. The move drew criticism from China, one of Venezuela’s largest oil buyers alongside India.
Additionally, Washington expanded sanctions on Iranian oil exports last week, targeting 19 entities and vessels, including a Chinese oil terminal used to store sanctioned Iranian crude. These sanctions heightened concerns about potential disruptions in global supply chains, sustaining the bullish sentiment in oil markets.
Further fueling price gains, the American Petroleum Institute (API) reported a 4.6 million-barrel decline in U.S. commercial crude inventories, far exceeding market expectations of a 2.5 million-barrel drop. The significant drawdown signals strengthening demand, with traders awaiting confirmation from the U.S. Energy Information Administration’s (EIA) upcoming data release.
However, price increases were tempered by diplomatic efforts to de-escalate the Russia-Ukraine conflict. The U.S. brokered agreements with both countries to halt attacks in the Black Sea and on each other’s energy infrastructure. A potential truce could lead to the easing of Western sanctions on Russian oil, potentially stabilizing global supply.
Additionally, lingering concerns over a global economic slowdown, exacerbated by U.S. tariffs, kept oil price gains in check.
