Brent crude futures climbed $1.43, or 2.26%, to settle at $64.76 a barrel, while U.S. West Texas Intermediate (WTI) crude finished up $1.43, or 2.38%, at $61.50.
The prospect of a significant reduction in global oil supply from stricter enforcement of sanctions on Iranian crude added upward momentum to prices, which have been volatile throughout the week. Andrew Lipow, president of Lipow Oil Associates, noted that such enforcement could tighten global supply, though he added, “I suspect China will continue to buy oil from Iran,” hinting at ongoing geopolitical complexities.
“The U.S. being a geopolitical risk is new for the market,” said John Kilduff of Again Capital, comparing the current climate to the geopolitical reordering that followed Russia’s invasion of Ukraine.
Compounding the market’s anxiety, China announced Friday that it would raise tariffs on U.S. goods to 125%, up from the previously announced 84%, effective Saturday. This came in direct response to Trump increasing tariffs on Chinese imports to 145% just a day earlier. Though the administration paused tariffs on many other U.S. trading partners for 90 days, the continued escalation between the world’s two largest economies is expected to weigh heavily on global trade flows and economic growth, thereby dragging down oil demand.
Ole Hansen of Saxo Bank said the damage to market confidence had already been done, noting that “prices [are] struggling to regain stability” despite the temporary reprieve in some tariffs. The U.S. Energy Information Administration reinforced those concerns Thursday, cutting both U.S. and global oil demand forecasts for this year and next, while lowering global economic growth expectations.