At 12:01 GMT, Light Crude Oil futures are trading $62.99, up $0.34 or +0.54%.
Will U.S. Tariffs on Russian Oil Buyers Upend Supply Chains?
Trump’s threat of secondary tariffs on countries purchasing Russian crude—primarily China and India—has raised the risk premium on oil. Analysts at Rystad Energy noted that any outcome tightening Russian oil flows would surprise markets and potentially lift prices. However, others remain skeptical.
“Tariffs that drive prices higher risk undermining U.S. domestic goals, and Trump knows it,” said PVM analyst John Evans, signaling the market’s hesitation to price in immediate action. Still, the uncertainty around Friday’s summit injects enough geopolitical risk to cap downside pressure, even as fundamentals weaken.
Bearish Supply Data Keeps Oil Bulls in Check
The Energy Information Administration (EIA) reported an unexpected 3 million barrel build in U.S. crude inventories last week, bringing total stocks to 426.7 million barrels. Analysts had expected a modest draw of 275,000 barrels. Net U.S. crude imports also surged by 699,000 barrels per day, further pressuring prices.
Lower-than-expected U.S. crude exports, impacted by global tariff pushback, are also weighing on market sentiment. “Crude exports remain soft—another bearish signal that adds to the supply overhang,” said Again Capital’s John Kilduff.
Federal Reserve Rate Cut Expectations Offer Limited Support
Expectations of a U.S. interest rate cut in September continue to offer some support for oil, with traders nearly unanimous in pricing in a reduction. Treasury Secretary Scott Bessent even floated the possibility of a 50 basis point cut following weak employment data. While this could boost demand prospects, traders remain focused on the supply-demand imbalance in the near term.
