The price of oil has increased by 1% due to sanctions imposed on Iran and a decline in crude stock levels in the United States. In early trading on Wednesday, oil prices increased by nearly 1%, building on the previous day’s gains. This movement comes as investors consider new sanctions imposed on Iran, a decline in U.S. crude inventories, and a more conciliatory stance from Donald Trump regarding the Federal Reserve.
The market stabilized following Trump’s decision on Tuesday to retract his threats to dismiss Fed Chair Jerome Powell, which came after a period marked by escalating criticisms regarding Powell’s reluctance to lower interest rates. Trump indicated the potential for a reduction in tariffs imposed on China. On Tuesday, the United States implemented new sanctions aimed at Seyed Asadoollah Emamjomeh, a prominent figure in the Iranian liquefied petroleum gas and crude oil shipping sector, along with his associated corporate network. The network operated by Emamjomeh facilitates the export of hundreds of millions of dollars in Iranian LPG and crude oil to international markets, according to a statement from the Treasury.
Brent crude futures increased by 61 cents, representing a 0.9% rise, reaching $68.05 per barrel at 0007 GMT. Meanwhile, U.S. West Texas Intermediate crude traded at $64.27 per barrel, up by 60 cents, or 0.94%. In the latest report, U.S. crude oil inventories experienced a decline of approximately 4.6 million barrels in the previous week, according to market sources referencing data from the American Petroleum Institute. Data from the U.S. government regarding oil stockpiles is scheduled for release at 10:30 a.m. ET on Wednesday. According to a survey conducted by Reuters, analysts anticipate an average decrease of 800,000 barrels in U.S. crude oil inventories for the previous week.
On Tuesday, Trump informed reporters that he would adopt a conciliatory approach in negotiations with Beijing, indicating that tariffs on imports from China would be substantially reduced following an agreement, though not eliminated entirely. U.S. Treasury Secretary Scott Bessent expressed optimism regarding a potential de-escalation of trade tensions between the U.S. and China. However, he noted that negotiations with Beijing have yet to commence and are expected to be a protracted process, as reported by an individual who attended his private presentation to investors at a JP Morgan conference. Trade tariffs have exerted pressure on crude futures, as investor apprehensions regarding a potential global economic slowdown intensify.