U.S. crude oil prices (WTI) saw a slight increase for the second consecutive day, driven by concerns over potential disruptions in Iranian oil supplies. Prices are currently trading around $71.25 per barrel, up by more than 0.60% on the day. However, the upside momentum remains limited due to conflicting economic factors influencing the market.
Recent U.S. sanctions targeting individuals and vessels involved in selling and transporting Iranian oil to China have heightened fears of a further decline in Iran’s oil exports. President Donald Trump has reaffirmed his “maximum pressure” strategy, aiming to reduce Iranian oil exports to zero. This stance has fueled market concerns over potential supply shortages.
However, gains in oil prices are being capped by fears regarding the impact of U.S. tariffs on the global economy. Trump has threatened to impose an additional 25% tariff on steel and aluminum imports, while trade tensions between the U.S. and China continue to escalate. These factors have raised concerns about slower global economic growth and weaker energy demand.
Additionally, the moderate strength of the U.S. dollar, supported by expectations that Trump’s protectionist policies could drive inflation higher, has also limited further gains in oil prices. A stronger dollar reduces the appeal of commodities priced in the U.S. currency, making oil more expensive for foreign currency holders.
Given these mixed economic signals, it may be prudent to wait for stronger confirmation of sustained bullish momentum before taking significant investment positions in oil. The market remains cautious after the declines seen in recent weeks.
