Oil prices edged higher Wednesday, extending the previous session’s gains, as geopolitical tensions and tightening U.S. crude supplies buoyed market sentiment. Brent crude futures climbed 0.8% to $67.99 per barrel, while U.S. West Texas Intermediate (WTI) rose 0.9% to $64.21 as of 04:00 GMT.
The upward momentum followed the announcement of fresh U.S. sanctions targeting Iran’s energy sector. The Treasury Department named Seyed Asadoollah Emamjomeh—a major player in Iranian liquefied petroleum gas (LPG) and crude shipping—and his corporate network as key facilitators of illicit exports valued in the hundreds of millions.
“These sanctions introduced fresh supply-side concerns that lent support to oil prices,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. The escalation in geopolitical risk, coupled with the U.S. inventory data, fueled bullish sentiment across energy markets.
U.S. Crude Stocks Drop by 4.6M Barrels
According to data from the American Petroleum Institute (API), U.S. crude oil inventories fell by approximately 4.6 million barrels last week—far surpassing the 800,000-barrel drawdown forecast in a Reuters poll.
The sharp decline in stockpiles provided further evidence of tightening supply conditions in the world’s largest oil consumer, reinforcing bullish momentum for benchmark futures. Official figures from the Energy Information Administration (EIA) were expected later on Wednesday and could confirm the drawdown trend.
Inventory Insights at a Glance:
- API Report: Crude stocks down 4.6 million barrels
- Analyst Expectations: 800,000-barrel decline
- EIA Data Release: Scheduled for 10:30 a.m. ET
These figures underscore the tightening balance in the physical oil market, which continues to face supply headwinds from geopolitical disruptions and OPEC+ output constraints.
Trade Signals Ease Market Jitters
Investor sentiment also benefited from a more measured tone by President Donald Trump on monetary and trade policy. Trump downplayed his recent criticism of Federal Reserve Chair Jerome Powell, signaling he would not seek Powell’s dismissal.
Additionally, Trump hinted at potential tariff reductions on Chinese imports, suggesting a more conciliatory approach to U.S.-China trade relations. Treasury Secretary Scott Bessent echoed this, forecasting a gradual de-escalation, though he noted formal negotiations have yet to begin.
The market has been particularly sensitive to trade headlines, as protracted tariffs have raised fears of a global economic slowdown—dampening demand for energy commodities.
With U.S. sanctions tightening supply and trade optimism improving demand outlooks, oil markets remain finely balanced heading into the second quarter.