Oil prices traded flat on Thursday in Asian markets, holding on to gains from earlier in the week as traders continued to weigh intensifying geopolitical risks and new tariff deals that could reshape global crude flows.
As of Thursday morning in Asia, WTI crude had dipped to $69.99 per barrel and Brent crude was trading at $73.10 per barrel. Though slightly lower on the day, both benchmarks have risen approximately 7% this week, underpinned by rising concern over supply constraints stemming from new U.S. sanctions and trade policies.
This week, President Trump shortened the deadline for Russia to reach a peace agreement with Ukraine from 50 days to just 10–12 days, warning of secondary tariffs of up to 100% on countries that continue to import Russian oil if no progress is made. India, a major buyer of discounted Russian crude, is at the center of this pressure campaign.
On Wednesday, Trump confirmed that 25% tariffs on Indian imports will take effect on Friday, although trade talks between the two nations are ongoing. The uncertainty is causing anxiety among Indian refiners and reverberating through global oil markets. The Brent-Dubai spread has shifted deeper into discount territory as refiners look to the Middle East for more secure alternatives.
“Concerns that secondary tariffs on countries importing Russian crude will tighten supplies continue to drive buying interest,” said Toshitaka Tazawa of Fujitomi Securities.
On the same day, the EIA reported a 7.7 million barrel build in crude inventories for the week ending July 25, the largest in months, bringing stockpiles to 426.7 million barrels. The increase was attributed to a sharp drop in exports, which fell by 1.16 million barrels per day.
Despite the bearish crude build, product inventories told a more supportive story. Gasoline stocks fell by 2.7 million barrels, far exceeding the 600,000-barrel draw forecast by analysts, suggesting healthy demand during the peak of the U.S. driving season. Meanwhile, distillate stocks rose by 3.64 million barrels, easing concerns over tightness in that market segment.
The mixed data produced a muted response from markets, as geopolitical headlines continued to overshadow fundamental inventory signals.
The U.S. also unveiled new sanctions on Wednesday, targeting more than 115 Iran-linked individuals, companies, and ships, escalating its “maximum pressure” campaign following airstrikes on Iranian nuclear sites in June. At the same time, the administration warned China, the top buyer of Russian and Iranian oil, that it could face steep tariffs if it continues these purchases.
These actions point to a broader effort by Washington to isolate major oil producers through economic pressure, raising the prospect of constrained global supplies in the months ahead.
Demand concerns, especially following the Fed’s relatively hawkish statements on Wednesday, are holding oil prices back, and traders will be watching inflation data and jobs numbers set to come out today and tomorrow.
By Charles Kennedy for Oilprice.com
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