Oil prices held near five-week highs on Tuesday as the market weighed US President Donald Trump’s threats to impose tariffs on Russian oil and growing concerns about the impact of the trade war on global growth.
Brent crude futures fell 6 cents, or 0.1%, to $74.71 a barrel at 12:08 GMT. Earlier in the session, they had risen above $75 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures fell 5 cents, or 0.1%, to $71.43 a barrel.
Oil prices held near five-week highs the previous day. This price volatility was due to several factors affecting the global market.
Sanctions, Tariffs, and Their Impact on the Oil Market
SEB analyst Olli Hvalby noted that tougher sanctions on Iran, Venezuela, and Russia could lead to a reduction in global oil supply. However, he added that US tariffs could weaken global energy demand and slow economic growth, which would in turn impact oil demand. Therefore, it was difficult to predict a clear direction for the oil market.
US President Donald Trump has made strong threats to impose secondary tariffs on Russian oil. Speaking to NBC News on Sunday, Trump explained that he is angry with Russian President Vladimir Putin and that he will impose tariffs of 25% to 50% on buyers of Russian oil if Moscow attempts to obstruct efforts to end the war in Ukraine.
US Threats Against Iran and Their Impact on the Market
In addition to his threats against Russia, Trump also made threats against Iran. He threatened to impose similar tariffs on Iran if it does not reach an agreement with the White House regarding its nuclear program. These threats put additional pressure on the oil market, as they could negatively impact oil flows from these two major sources.
Oil Price Forecast: Possible Decline Due to Economic Slowdown
A Reuters poll of 49 economists and analysts conducted in March 2025 predicted that oil prices would remain under pressure this year due to US tariffs. Additionally, economic slowdowns in India and China are expected to lead to a decline in oil demand. Production by OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) is also increasing global supply, further increasing supply pressures.
Slowing economic growth is expected to contribute to weaker fuel demand, which could offset any supply reductions resulting from Trump’s threats. However, prices remain partially supported by several factors. Partial Shutdown of Russian Export Terminals and Its Impact on Global Supply
Oil prices found some support after Russia ordered the shutdown of two of its three terminals at Kazakhstan’s main oil export terminal. This came at a time when Kazakhstan was locked in a standoff with OPEC+ over overproduction. Two industry sources told Reuters that Kazakhstan would have to cut oil production as a result of this measure. Another source added that repair work at the Union Caspian Pipeline Terminal would take more than a month. These developments added some unexpected factors to the market, which provided partial support for oil prices. It will be important to closely monitor developments in these areas in the coming period to determine whether prices will continue their upward trend or come under greater downward pressure.
Anticipation in the OPEC+ Meeting and Expectations of Increased Production
The market will closely watch the OPEC+ Ministerial Committee meeting on April 5, 2025, where the group will review its current policies. Some sources say OPEC+ plans to increase production by 135,000 barrels per day in May 2025. This production increase is likely to continue to impact prices, as oversupply continues to weigh on markets.
US Oil Inventory Forecast
In contrast, expectations for US oil inventories were for a significant decline. According to a Reuters report, five analysts expect US crude inventories to have fallen by about 2.1 million barrels during the week ending March 28. This decline in inventories should support prices in the short term, as it may indicate a decline in domestic supply.
Future Impact on Global Markets
The future of prices remains highly uncertain due to a combination of complex factors. US threats to impose tariffs on Russia and Iran are unlikely to lead to immediate price shifts, but their impact on the market could be significant in the long term. OPEC+ may increase pressure to boost production, which could push prices toward equilibrium in the near term. Meanwhile, the economic slowdown in China and India will continue to play a significant role in shaping market direction in the coming years.
In conclusion, oil prices remain relatively stable around $75 per barrel, despite several market factors, such as US threats against Russia and Iran. Slowing global economic growth, coupled with increased production from OPEC+, could significantly impact oil demand and supply in the coming months.
