March 8, 2025
Driven by geopolitical tensions, OPEC+ supply adjustments and growing concerns over a global economic slowdown fueled by US trade policies, oil prices steadily declined throughout the week.
Going by international benchmark Brent crude went down by around 3.4% and traded at $70.47 per barrel as against last week’s closing price of $72.96 per barrel. West Texas Intermediate (WTI), the American benchmark dropped with about 3.6% trading at $67.23 per barrel on Friday as against $69.77 per barrel at last Friday’s closing price
US President Donald Trump announced a 25% tariff on imports from Canada and Mexico, alongside an increase in tariffs on Chinese goods from 10% to 20%. The tariffs announcement on Tuesday, fueled fears of a potential trade war.
Analysts caution that these announcements could stifle economic growth and weaken energy demand, leading to downward pressure on oil prices.
Oil markets also reacted to OPEC+ reaffirming its decision on Monday to gradually increase production from April 2025.
READ MORE; OPEC Tasks Africa On Unlocking Her 120bn Barrels Of Oil Reserve, Potentials.
The group confirmed that it would phase out voluntary production cuts of 2.2 million barrels per day, marking the first increase since 2022.
The decision to stabilize supply contributed to declining oil prices as investors anticipated oversupply in the coming months. On Tuesday, Brent crude fell below $70 per barrel for the first time since October 2024, with WTI also experiencing a notable drop.
Meanwhile, according to US Energy Information Administration, the commercial crude oil stocks in the country increased by about 3.6 million barrels last week.
A larger-than-expected rise in crude inventories added to concerns about weakening domestic demand. Oil prices briefly rebounded on Thursday after the US administration announced temporary exemptions on certain tariffs under the US-Mexico-Canada Agreement
READ MORE; Oil Prices Rise Despite Expected Resumption Of Iraq Export
The move eased some trade war concerns, though uncertainty remains regarding future tariff policies and their potential impact on global markets.
A tense Oval Office meeting between Trump and Zelensky, last week, over a failed rare-earth deal, fueled market volatility. However, European leaders at a UK summit reaffirmed their support for Ukraine. Oil prices may come down If peace talks progress, easing geopolitical risks and oversupply concerns.
US Treasury Secretary Scott Bessent’s call for tougher sanctions on Russia and Iran—including a ‘maximum pressure’ campaign on Iran’s oil and Russia’s energy exports, also raised supply concerns, that may affect oil prices.
