London February 5 2025: Oil prices dropped over 1% on Wednesday as rising U.S. stockpiles and concern about a new Sino-U.S. trade war fuelled fears of weaker economic growth, offseting U.S. President Donald Trump’s renewed push to eliminate Iranian crude exports.
Brent crude futures were down 98 cents, or 1.3%, at $75.22 a barrel at 1428 GMT. U.S. West Texas Intermediate crude (WTI) was down 94 cents, also 1.3%, to $71.76.
Oil on Tuesday traded in a wide range, with WTI falling at one point by 3% to its lowest since Dec. 31 after China announced tariffs on U.S. imports of oil, liquefied natural gas and coal in retaliation for U.S. levies on Chinese exports.
Prices rebounded, however, after Trump restored the “maximum pressure” campaign on Iran to curtail its nuclear programme he enacted in his first term, which cut Iranian crude exports close to zero.
Ongoing trade tensions between the U.S. and China may dampen demand for oil, putting downward pressure on prices.
“Trump tariff chaos and trade war is no good for global growth and oil demand growth. Business investments and consumer spending will likely fall in the face of these highly erratic and growth-negative actions,” said Bjarne Schieldrop, chief commodities analyst at SEB.
“The oil market is now caught between increasing fears that an escalating trade war will damage global oil demand growth on the one hand and possible sudden disruption of Iranian oil export,” he added.
