Oil prices rose on Wednesday, building on the gains from the previous day, as investors evaluated a new round of U.S. sanctions on Iran, a decline in U.S. crude stocks, and a softer stance from President Donald Trump regarding the Federal Reserve. Brent crude futures increased by 55 cents, or 0.8 percent, reaching $67.99 a barrel at 04:00 GMT, while U.S. West Texas Intermediate crude rose by 54 cents, or 0.9 percent, to $64.21 a barrel.
New sanctions target Iranian energy supplies
The U.S. issued new sanctions targeting Iranian liquefied petroleum gas and the crude oil shipping magnate Seyed Asadoollah Emamjomeh along with his corporate network on Tuesday. Emamjomeh’s network is responsible for shipping hundreds of millions of dollars’ worth of Iranian LPG and crude oil to foreign markets, according to a statement from the U.S. Treasury. “The U.S. issued fresh sanctions targeting Iranian energy supplies, which worried markets,” reported Reuters, citing senior market analyst Priyanka Sachdeva at Phillip Nova.
Positive market sentiment amid trade talks
Both benchmark prices this morning were also supported by hopes for a positive outcome in discussions between the U.S. and China regarding import tariffs, Sachdeva noted. Trump on Tuesday eased concerns about potentially firing Fed Chair Jerome Powell following days of escalating criticism for not reducing interest rates. He also indicated the likelihood of lower tariffs on Chinese imports.
Read more: Oil prices climb to $66.77 as Trump pressures Fed, tariffs cloud outlook
U.S. crude oil inventories decline
Meanwhile, U.S. crude oil inventories decreased by approximately 4.6 million barrels last week, as reported by market sources citing American Petroleum Institute (API) data. U.S. government data on oil stockpiles is expected at 10:30 a.m. ET (14:30 GMT) on Wednesday. Analysts, on average, anticipated an 800,000 barrel decline in U.S. crude oil stocks for the previous week, according to a Reuters poll.
Trump’s optimism in trade negotiations
Trump told reporters on Tuesday that he would be “nice” in negotiations with China and expressed that tariffs would fall significantly following a deal, though not to zero. U.S. Treasury Secretary Scott Bessent commented that he believes there will be de-escalation in Sino-U.S. trade tensions, but noted that negotiations have not yet commenced and would likely be a “slog,” according to a source who attended his closed-door presentation to investors at a JP Morgan conference.
Trade tariffs have posed challenges for crude futures due to investor concerns about their potential to hinder global economic growth.
