Crude oil prices fell to their lowest level this year, driven by China’s retaliatory tariffs on US crude imports and rising US stockpiles. On Tuesday, China’s State Council Tariff Commission announced a 15% tariff on coal and liquefied natural gas (LNG) and a 10% levy on US crude oil, farm equipment, and vehicles.
At the same time, US crude inventories surged for a second consecutive week, signaling weakening demand and exacerbating price declines. On Wednesday, West Texas Intermediate (WTI) crude dropped 2.3% to $71 per barrel, while Brent crude futures fell 2.09% to $74.61 per barrel.
Despite a minor rebound in Thursday’s Asian session, both benchmarks remained at their lowest levels this year. US crude stockpiles rose by 8.66 million barrels in the week ending 31 January, surpassing the estimated one million barrel increase.
President Donald Trump pressured Saudi Arabia and OPEC to lower oil prices while pushing for increased US crude production. His new 10% tariffs on Chinese goods triggered retaliation, adding uncertainty to the global oil market.
Although oil prices have fallen sharply, tensions in the Middle East remain a bullish factor. Trump’s proposal to control Gaza and tighter sanctions on Iran could inflame regional conflicts and impact oil markets. Iran, holding 24% of the Middle East’s oil reserves, has increased production to 1.5 million barrels per day since 2022.
However, analysts warn that Trump’s re-election and escalating regional tensions could stall Iran’s oil expansion plans. OPEC+, responding to US sanctions threats, agreed to increase supply from April and removed the EIA from its monitoring sources.
