Oil prices recorded a significant drop on Wednesday, with Brent crude falling to $78.93 per barrel and West Texas Intermediate (WTI) crude reaching $75.37 per barrel. This decline followed U.S. President Donald Trump’s declaration of a national energy emergency, alongside a plan to boost oil and gas production, including easing environmental regulations, raising concerns in the markets about the future of supply and demand.
Trump’s remarks on his intention to refill the U.S. Strategic Petroleum Reserve have sparked questions about their impact on the market. Analysts at Morgan Stanley expect this move to have minimal short-term effects on production rates but believe it could limit the decline in demand for refined products. However, markets remain watchful to see if this policy will be implemented effectively to restore balance.
In addition to energy developments, Trump’s statement about imposing a 25% tariff on imports from Canada and Mexico has added further pressure to the markets. Analysts suggest this move could weaken global oil demand, particularly as it threatens to disrupt trade between the U.S. and its key partners, intensifying concerns over energy market stability.
A rare winter storm also affected oil production in North Dakota, reducing output by up to 160,000 barrels per day due to severe weather conditions. However, the impact on production in Texas was limited, with stable gas flows and adequate gasoline supplies. The influence of these weather-related factors on the market remains minor compared to political and trade tensions, which continue to drive prices in the near term.
