Oil prices edged lower on Tuesday as traders braced for reciprocal tariffs that President Trump is set to announce, raising concerns about a deepening global trade war. Brent crude fell 28 cents (-0.37%) to $74.49, while WTI crude declined 28 cents (-0.39%) to $71.20, retreating from Monday’s five-week highs.
Market sentiment remained cautious as details on the tariffs remain unclear, with analysts worried about demand destruction outweighing supply concerns. While stricter sanctions on Iran, Venezuela, and Russia could tighten supply, SEB analyst Ole Hvalbye noted that tariffs could also slow global economic growth, impacting future oil demand. Trump reiterated his 25%-50% secondary tariff threat on Russian oil buyers, which could disrupt global flows and pressure Moscow’s major customers, China and India. He also warned of similar tariffs and possible airstrikes on Iran if a nuclear agreement isn’t reached.
Meanwhile, supply constraints emerged as Russia ordered Kazakhstan’s main oil terminal to close two of its three moorings, forcing Kazakhstan to cut production, with repairs expected to last over a month.
The market is also focused on the upcoming April 5 OPEC+ meeting, where the group is expected to approve a 135,000 bpd production hike for May, continuing April’s increase. Ahead of the next U.S. inventory report, analysts forecast a 2.1 million-barrel draw in crude stockpiles for the week ending March 28.