Oil Prices Inch Higher as Market Assesses Trump’s Trade Tariffs
Oil prices saw a slight uptick on Thursday following a sharp hike in Saudi Arabia’s crude prices for March, though the gains barely offset the steep decline from the previous session.
As of 0952 GMT, Brent crude futures rose 28 cents (0.4%) to $74.89 per barrel, while West Texas Intermediate (WTI) crude climbed 35 cents (0.5%) to $71.38.
The recovery comes after oil prices fell more than 2% on Wednesday amid a substantial increase in U.S. crude and gasoline inventories, raising concerns over weakening demand. Investors also weighed the impact of new U.S.-China trade tariffs, including fresh duties on energy products.
Since January 15, just five days before Donald Trump took office, oil prices have dropped nearly 10%, reflecting uncertainty over the new administration’s trade and economic policies.
Market Reacts to Saudi Price Moves
While Trump’s tariff policies continue to drag on the market, Saudi Aramco (TADAWUL:2222) provided some relief by raising its official selling prices (OSP) for crude headed to Asia. The move helped ease some of Wednesday’s losses, although volatility remains high.
“After the sharp sell-off and Saudi Aramco’s pricing decision, we’re likely to see some traders covering short positions, especially around the $70–$68 support region,” said Tony Sycamore, market analyst at IG.
U.S.-China Trade War Adds to Bearish Sentiment
Trump has wasted no time in imposing new tariffs on China, but they have so far been less aggressive than expected. Beijing retaliated this week by slapping tariffs on U.S. oil, liquefied natural gas (LNG), and coal. However, the direct impact is expected to be limited since China’s energy imports from the U.S. are relatively small.
Despite some expectations that tariffs could tighten supply and lift prices, analysts remain cautious.
“While some tariff measures may put upward pressure on oil, the broader impact is likely to be bearish, given the potential economic slowdown and Trump’s history of making trade carve-outs for energy to avoid disrupting supply,” noted analysts at BMI.
As markets attempt to navigate the unpredictable policy landscape, analysts expect continued volatility in oil prices, with traders watching closely for further developments in trade relations and energy demand trends.
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