Oil Prices Rise To Two-Week High On Supply Concerns, US Tariffs Limit Gains
Oil prices climbed to a two-week high on Tuesday as sanctions on Russia and Iran raised concerns about supply disruptions, while rising Middle East tensions added to market jitters.
However, gains were capped by worries that US tariffs could dampen global economic growth and energy demand.
Brent crude settled US$1.13 higher at US$77.00 per barrel, up 1.5%, while US West Texas Intermediate (WTI) rose US$1.00, or 1.4%, to US$73.32 per barrel. Both benchmarks recorded their highest closing levels since Jan 28.
US sanctions have disrupted shipments of Russian oil to major buyers like China and India, while fresh restrictions on networks shipping Iranian crude to China have further tightened supply.
Meanwhile, tensions in the Middle East remain high, with the risk of renewed conflict adding to uncertainty.
Despite these supply concerns, oil price gains were checked by US President Donald Trump’s decision to raise tariffs on steel and aluminium imports to 25%, fuelling fears of a potential trade war that could slow economic growth.
Morgan Stanley warned that “tariffs and counter-tariffs could weigh on the oil-intensive sectors of the global economy.”
Meanwhile, the US Energy Information Administration (EIA) projected that global oil supply and demand will hit record highs in 2025 and 2026, with production expected to rise to 104.6 million barrels per day (bpd) in 2025.
The market now awaits US crude inventory data, with analysts forecasting a 3-million-barrel build in stockpiles for the week ended Feb 7. If confirmed, this would mark the third consecutive weekly increase in US oil reserves.
Reuters
