Oil prices experienced a notable uptick on Friday, with Brent and West Texas Intermediate (WTI) crude both rising by over $1. This surge was primarily influenced by remarks from U.S. Energy Secretary Chris Wright, who indicated potential measures to halt Iran’s oil exports as part of the United States’ strategy to negotiate over Iran’s nuclear ambitions. Brent crude futures closed at $64.76 per barrel, marking an increase of $1.43, or 2.26%. Meanwhile, WTI crude ended the day at $61.50 per barrel, also gaining $1.43, or 2.38%.

Impact of Geopolitical Tensions

Wright’s statements came at a time when oil markets were already experiencing volatility, fueled by the newly implemented tariffs by the Trump administration. This week, President Donald Trump announced tariffs that have prompted traders to reevaluate the geopolitical landscape affecting crude oil.

• Key Developments:
  • China declared a 125% tariff on U.S. goods, a sharp increase from the previously set 84%.
  • This escalation followed Trump’s own tariff hike on Chinese imports to 145%.
  • The ongoing trade tensions between the U.S. and China threaten to disrupt global trade routes and economic growth.

Market Sentiment and Demand Concerns

According to Kaynat Chainwala, AVP of Commodity Research at Kotak Securities, the WTI crude market had recently reacted positively to Trump’s announcement of a 90-day pause on imposing new tariffs on various countries. However, the exclusion of China from this pause, coupled with escalating tariffs, has dampened market sentiment significantly.

Chainwala remarked, “The exclusions and increased duties have negatively impacted demand forecasts, pushing WTI back below the critical $60 per barrel mark.”

Revised Oil Demand Forecast

Adding to the market’s bearish outlook, the Energy Information Administration (EIA) has downgraded its forecast for global oil demand growth for 2025. The new estimate stands at 900,000 barrels per day, which is down by 400,000 barrels from earlier projections.

As tariffs on Chinese imports rise, fears of retaliation grow, raising concerns about a potential slowdown in the global economy. The fluctuating dynamics within the oil market indicate significant ongoing pressures, keeping WTI crude prices under the crucial $60 threshold.

In conclusion, the interplay between U.S. tariffs, geopolitical tensions, and revised demand forecasts showcases a complex landscape for crude oil prices, one that traders will need to navigate carefully in the coming weeks.