Oil prices edged higher in Asian trading on Friday but remained on course for a third straight weekly decline, driven by renewed concerns over trade tensions and global demand uncertainties.
Brent crude futures rose by 32 cents to $74.61 per barrel as of 0500 GMT but were set for a 2.8% weekly drop. US West Texas Intermediate (WTI) crude gained 24 cents to reach $70.85 per barrel, marking a potential 2.3% decline for the week.
Yeap Jun Rong, a market strategist at IG, noted that oil prices stabilized slightly after a volatile session following US sanctions targeting Iranian crude exports to China. The US Treasury announced Thursday new sanctions on individuals and tankers involved in transporting millions of barrels of Iranian crude annually to China.
“While the sanctions supported oil prices briefly, gains were limited as traders remained wary of broader supply and demand concerns,” Yeap explained.
Factors such as potential production increases from OPEC+ and the United States, combined with global demand fears fueled by tariff disputes, contributed to the cautious sentiment.
President Donald Trump’s trade policy moves remain a key concern for the oil market. His recent announcement of a 10% tariff on Chinese imports as part of efforts to address the US trade balance rattled traders, despite the temporary suspension of planned tariffs on Mexico and Canada.
“Fears of a trade war are casting a shadow over global oil demand prospects,” analysts at BMI Research noted in a Friday report.
The potential impact on demand has overshadowed Trump’s renewed pressure campaign on Iran, which includes efforts to reduce the country’s oil exports to zero from the current levels of over 1.5 million barrels per day.
Additional downward pressure came from swelling US crude inventories, which saw a significant jump last week amid ongoing refinery maintenance. The unexpected rise in stockpiles, coupled with President Trump’s pledge to increase domestic oil production, has kept traders on edge.
Despite Friday’s modest gains, the outlook for oil prices remains cautious as the market grapples with complex geopolitical developments and economic headwinds.
