Oil prices rose on Thursday after a U.S. court blocked most of President Donald Trump’s “Liberation Day” tariffs from taking effect. The market was also watching out for potential new U.S. sanctions on Russian crude flows and an OPEC+ decision on hiking output in July.
As of 4:37 GMT, Brent crude futures climbed 1.14 percent to $65.64 a barrel. Meanwhile, U.S. West Texas Intermediate crude gained 1,26 percent to $62.62 a barrel.
U.S. trade court blocks Trump’s sweeping tariffs
Oil prices climbed after a U.S. trade court ruled on Wednesday that Trump overstepped his authority by imposing global tariffs on imports from U.S. trading partners. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminium using a different statute.
The ruling raised risk appetite across global markets, which have been on edge about the impact of the levies on economic growth. However, analysts said the relief may only be temporary, given that the Trump administration has said it will appeal. Wall Street futures and Asian equities also climbed.
The Trump administration filed a notice of appeal, challenging the court’s authority and signalling a potential escalation to the Supreme Court if necessary.
Trump had levied “reciprocal tariffs” on multiple countries on April 2, sparking fears of a global recession. However, many of those country-specific tariffs were paused a week later.
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Supply concerns rise amid new sanctions and OPEC+ hikes
On the supply front, markets are concerned about potential new sanctions on Russian crude, which could further support oil prices.
In addition, the Organization of the Petroleum Exporting Countries and allies could agree on Saturday to boost oil production hikes in July. Analysts expect OPEC+ to agree on another large supply increase of 411,000 barrels per day. They also expect similar increases until the end of the third quarter, as the group increases its focus on defending its market share.
Further adding to supply risks, Chevron has terminated its oil production and a number of other activities in Venezuela, after its key license was revoked by the Trump administration in March. Venezuela in April cancelled cargoes scheduled to Chevron, citing payment uncertainties related to U.S. sanctions. Chevron was exporting 290,000 barrels per day of Venezuelan oil, or over a third of the country’s total before that.
On Thursday, investors will be awaiting the weekly reports from the American Petroleum Institute (API) and the Energy Information Administration. U.S. crude and gasoline stocks are expected to have fallen last week, while distillate inventories rose.
In addition, a wildfire in Alberta, Canada, has prompted the temporary shutdown of some oil and gas production, which could reduce supply.
