Oil prices edged higher on Wednesday as traders anticipated U.S. reciprocal tariffs set to be announced later today, which could heighten investor uncertainty and the risk of a global trade war, potentially dampening crude demand. Brent crude rose 46 cents (+0.6%) to $74.95, while WTI gained 51 cents (+0.7%) to $71.71.
The market largely shrugged off a bearish U.S. crude inventory report, which showed an unexpected 6.2 million-barrel build last week, driven by higher Canadian imports in anticipation of potential tariffs. UBS analyst Giovanni Staunovo noted that, despite the inventory increase, the market reacted neutrally, likely focusing more on geopolitical risks. President Trump’s tariff policies continue to raise fears of inflation, economic slowdown, and trade disputes, limiting oil price gains. Brent faced resistance above $75, as the focus shifted from sanctions-driven supply constraints to Trump’s tariff announcement and its possible negative impact on demand.
Mexican President Claudia Sheinbaum helped ease concerns of a U.S.-Mexico trade war by confirming Mexico will not impose retaliatory tariffs. Meanwhile, Trump reinforced sanctions on Iran and threatened secondary tariffs on Russian oil, aiming to curb Tehran’s exports. Analysts at BMI warned that weaker-than-expected tariffs may not spark a rally in Brent, while stronger-than-expected measures could trigger a selloff.
Further complicating global supply, Russia restricted another major oil export route, suspending a mooring at the Black Sea port of Novorossiisk a day after limiting loadings from the Caspian pipeline. Russia, the world’s second-largest oil exporter, produces 9 million barrels per day, accounting for nearly 10% of global output.