Brent crude oil futures hovered near $74 per barrel on Friday, marking an over four-week high and setting the stage for a third consecutive weekly gain, as concerns over tightening global supply continued to drive prices higher.
Oil set for third weekly gain
The market remained on edge after the US threatened to impose 25% tariffs on nations purchasing Venezuelan crude, a move that could significantly disrupt trade flows, particularly to China, which is Venezuela’s largest buyer. Following the announcement, India’s Reliance Industries—the second-largest buyer of Venezuelan oil—confirmed plans to halt imports from the sanctioned nation, further exacerbating supply concerns.
Additionally, data from the US Energy Information Administration (EIA) showed that US crude stockpiles fell by 3.34 million barrels last week, more than twice the expected decline of 1.5 million barrels. This unexpected drawdown reinforced signs of strong demand, particularly as the summer driving season approaches in the US. The tightening supply picture was further supported by ongoing geopolitical uncertainties, including heightened tensions in the Middle East and disruptions to key shipping routes.
Monitoring US tariffs impact
Meanwhile, market participants are also closely assessing the potential impact of newly announced US auto tariffs on the oil market. The tariffs, expected to hit major exporters such as China, Japan, and the European Union, could slow global economic growth and dampen demand for crude. Additionally, traders are preparing for additional levies set to take effect on April 2, which may further reshape trade dynamics and impact fuel consumption patterns worldwide.
OPEC+ to begin reviving idled production in April
Applying some downward pressure to prices, OPEC+ is set to begin reviving idled production in April, marking the first in a planned series of supply increases aimed at stabilizing the market. Analysts are also watching for signs of increased Russian oil exports, as reports indicate Moscow may ramp up shipments despite Western sanctions. The combination of OPEC+ supply increases and a potential return of Russian crude could help offset some of the recent supply constraints, leading to heightened volatility in oil prices in the coming weeks. Traders will continue to monitor geopolitical developments, inventory levels, and demand trends to gauge the direction of the market.
