Oil prices rose on Thursday after Saudi Arabia’s Aramco sharply raised March oil prices. The increase in oil prices came after the biggest slide in benchmark Brent prices in nearly three months yesterday.
As of 6:03 GMT, Brent crude prices gained 0.21 percent to $74.7, while WTI futures for March delivery rose 0.45 to $71.36 a barrel.
In the previous session, oil prices fell more than 2 percent as a large buildup in U.S. crude and gasoline stockpiles signaled weaker demand. The U.S. Energy Information Administration‘s (EIA) weekly report showed that crude oil stockpiles in the United States for the week ending January 31 climbed by 8.664 million barrels, compared to a rise of 3.463 million barrels in the previous week.
Market to remain volatile in the coming weeks
Investors weighed the implications of a U.S.-China trade tariff war, including duties on energy products. Crude oil prices dipped around 10 percent from their 2025 high on January 15, five days before Donald Trump took office. Analysts expect markets to remain volatile in the coming weeks as investors adjust to Trump’s new policy positions and tariffs.
Aramco raised the official selling price for flagship Arab Light crude by $2.40 to $3.90 per barrel above the Oman/Dubai benchmark average, Saudi Aramco said in a statement on Wednesday.
The Saudi oil exporter steeply increased crude prices for March across all other regions as well. Aramco raised March prices for buyers in northwest Europe and the Mediterranean by $3.20 a barrel for all crude grades and raised the OSPs for grades it sells to the United States by 10-30 cents a barrel. This sharp increase in prices triggered Wednesday’s sell-off.
U.S.-China trade war impacts market sentiment
Last month, the U.S. imposed aggressive new sanctions on Russia’s oil trade, targeting the “shadow vessels” that are utilized to evade trade blockades. Since assuming office, Trump has imposed tariffs on China, although they fell short of his 60 percent campaign threats.
On Tuesday, China’s finance ministry announced a package of tariffs on several U.S. products, in an immediate response to a 10 percent tariff on Chinese imports. Some of China’s tariff announcements include duties on imports of U.S. oil, liquefied natural gas and coal. However, China’s purchases from the U.S. are relatively modest, decreasing the impact of the new measures.
Additionally, China put several companies, including Google, on notice for possible sanctions in a measured response to Trump’s tariffs.
Some tariff announcements may support a rise in oil prices, however, their impact will likely be bearish due to their impact on the global economy. These tariffs also come at a time when Trump reiterated his willingness to support additional production, limiting the impact of supply on prices.
Read: UAE gold prices gain AED1, global rates hover near record high on strong safe-haven demand
OPEC+ to increase production starting in April
Despite the emerging tariff policies, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) continued to uphold its current oil production strategy, rejecting Trump’s calls to reduce prices. The group remains dedicated to a gradual easing in production cuts, set to commence on April 1, depending on low inventories and increasing global demand.
The OPEC+ group has been reducing output by 5.85 million barrels per day or around 5.7 percent of global supply, as part of a series of agreements initiated in 2022.
In December, OPEC+ extended its latest round of cuts through the first quarter of 2025, delaying the planned output increase until April due to weak demand and rising supply from outside the group.
