Brent crude fell 0.4% on Tuesday and is now trading below $75 a barrel, while West Texas Intermediate is trading above $71. U.S. President Donald Trump is set to announce his tariffs later on Wednesday, with full tariffs set to take effect immediately, according to his spokesman.
Several proposals are said to be under consideration, including a tiered tariff system, with a set of flat rates for different countries, and more personalized “reciprocity” programs. Despite the imminent announcement, the broad measures remain under discussion.
Chris Weston, head of research at Pepperstone Group in Melbourne, said that after last month’s strong gains, “the market has stepped on the brakes. Market participants are reducing exposure, hoping to reduce potential volatility when ‘liberation day’ comes, knowing that the ultimate reaction to tariff announcements is really hard to say.”
Tariffs threaten the outlook for global economic growth, adding to a series of conflicting drivers since Trump took office. Sanctions have the potential to curb supply from Russia and Iran, even as OPEC and its allies began to increase production this month, fueling concerns about oversupply later this year.
The United States may further tighten sanctions on Russia. A group of 50 Republican and Democratic senators proposed a sanctions package that would impose sanctions on the third-largest oil producer and its fuel buyers if Russian President Vladimir Putin refuses to negotiate a ceasefire with Ukraine in good faith or violates an eventual agreement.
Separately, the industry-funded American Petroleum Institute reported a sharp increase of 6 million barrels in U.S. crude inventories last week, according to a document seen by Bloomberg. Inventories at Cushing, Oklahoma, the delivery point for WTI, rose by 2.2 million barrels, the report said, which would be the biggest increase since January 2023 if official data later on Wednesday confirms the figure.
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