Oil prices increased for a fourth consecutive day on Thursday, as investors expressed concerns regarding supply shortages in light of U.S. President Donald Trump’s advocacy for a prompt resolution to the conflict in Ukraine and the potential imposition of tariffs on nations purchasing Russian oil.
Brent crude futures for September delivery, expiring on Thursday, increased by 27 cents, or 0.4%, reaching $73.51 a barrel. Meanwhile, U.S. West Texas Intermediate crude for September saw a rise of 37 cents, or 0.5%, bringing it to $70.37 a barrel. Both benchmarks concluded the trading session with a 1% increase on Wednesday. The more active Brent October contract increased by 29 cents, representing a 0.4% rise, reaching $72.76.
“Concerns that secondary tariffs on countries importing Russian crude will tighten supplies continue to drive buying interest,” stated Toshitaka Tazawa, an analyst at Fujitomi Securities. On Tuesday, Trump announced that he would initiate measures against Russia, which would include imposing 100% secondary tariffs on its trading partners, should there be no significant progress in ending the war within a revised timeframe of 10-12 days, thereby advancing the previous 50-day deadline.
On Wednesday, Trump indicated that the United States continues to engage in trade negotiations with India, following his earlier announcement that a 25% tariff will be imposed on goods imported from India starting Friday.
The United States has issued a warning to China, the foremost purchaser of Russian oil, indicating that it may encounter substantial tariffs should it continue its purchasing activities.
On Wednesday, the U.S. Treasury Department unveiled new sanctions targeting more than 115 individuals, entities, and vessels associated with Iran, indicating that the Trump administration is intensifying its “maximum pressure” strategy following the bombing of Tehran’s critical nuclear facilities in June. China stands as the leading purchaser of Iranian oil. In the week ending July 25, U.S. crude oil inventories experienced an increase of 7.7 million barrels, reaching a total of 426.7 million barrels. This rise was attributed to a decline in exports, as reported by the Energy Information Administration on Wednesday. Analysts had anticipated a reduction of 1.3 million barrels.
Gasoline stocks decreased by 2.7 million barrels, reaching 228.4 million barrels, significantly surpassing expectations of a 600,000-barrel decline. “U.S. inventory data indicated a larger-than-anticipated increase in crude stocks; however, a more significant-than-forecasted draw in gasoline reinforced perceptions of robust demand during the driving season, leading to a neutral effect on the oil market,” stated Tazawa from Fujitomi Securities.