Oil prices gain on trade war shifts and tightening supply

Image Credits: UnsplashImage Credits: Unsplash
  • Oil prices rose due to U.S. tariff exemptions, China’s increased crude imports, and looming Iranian sanctions.
  • OPEC cut its 2019 demand forecast amid trade war uncertainty and slowing global economic growth.
  • Geopolitical risks and supply disruptions (Kazakhstan, Libya, Venezuela) counterbalance record U.S. shale output.

[WORLD] Oil prices rose in early trade on Tuesday, lifted by President Donald Trump's proposed tariff exemptions and a resurgence in Chinese crude oil imports ahead of tighter Iranian supply. Brent crude futures jumped 27 cents, or 0.42%, to $65.15 per barrel at 0046 GMT, while U.S. West Texas Intermediate crude advanced 26 cents, or 0.42%, to $61.79.

The recent uptick in oil prices also reflects broader market optimism as geopolitical tensions in the Middle East continue to simmer. Analysts note that any escalation in conflicts involving key oil-producing regions, such as Libya or Venezuela, could further tighten global supply and push prices higher. This comes as the U.S. prepares to fully enforce sanctions on Iranian oil exports next month, a move that has already spurred preemptive buying from major importers like China and India.

In the latest development in Trump's erratic trade battle, he said he was considering revising the 25% tariffs slapped on foreign auto and auto parts imports from Mexico, Canada, and other countries. The erratic U.S. trade policies have generated uncertainty in global oil markets, prompting OPEC to decrease its demand forecast for the first time since December.

OPEC’s revised forecast highlights growing concerns over slowing economic growth, particularly in Europe and Asia, where manufacturing activity has shown signs of weakening. The cartel now expects global oil demand to grow by 1.21 million barrels per day (bpd) in 2019, down from its previous estimate of 1.24 million bpd. This adjustment underscores the delicate balance OPEC and its allies face as they weigh production cuts against softening demand.

The Trump administration stated on Friday that it will give tariff exemptions for cellphones, computers, and some other electronic items, the majority of which are imported from China. This caused both oil benchmarks to settle marginally higher on Monday.

On Sunday, Trump stated that he will disclose the duty rate on imported chips within the next week, and a Monday Federal Register document revealed that the administration had launched an investigation into semiconductor imports on April 1.

Meanwhile, market participants are closely monitoring U.S. crude inventory data, due later this week, for signs of tightening supply. Last week’s report from the Energy Information Administration (EIA) showed an unexpected drawdown in stockpiles, which provided temporary support to prices. A repeat of this trend could reinforce bullish sentiment, especially as refiners ramp up activity ahead of the summer driving season.

Data released on Monday showed that China's crude oil imports in March increased by over 5% over the previous year, as arrivals of Iranian oil climbed in anticipation of stronger US sanctions enforcement.

Kazakhstan stated on Monday that its oil output declined 3% in the first two weeks of April compared to the March average, confirming a Reuters report, but it remains above its OPEC+ quota.

The Kazakh production dip, while modest, adds to a series of supply-side disruptions that have kept traders on edge. From unplanned outages in Nigeria to voluntary cuts by Saudi Arabia, the cumulative effect of these constraints has helped offset some of the pressure from rising U.S. shale output. However, with American production hovering near record highs, the sustainability of the current price rally remains uncertain.


Economy Malaysia
Image Credits: Unsplash
EconomyAugust 3, 2025 at 6:30:00 PM

Muslim-friendly travel platform revamped offerings with enticing new packages

Travel is changing—not just in where people go, but in how they move, what they value, and how they choose to experience the...

Economy World
Image Credits: Unsplash
EconomyAugust 1, 2025 at 3:00:00 PM

Asia must harness AI for natural disaster management

Wednesday’s tsunami warnings triggered by a deep-sea earthquake off Russia’s Kamchatka Peninsula were not just seismological events. They were institutional ones. As alerts...

Economy World
Image Credits: Unsplash
EconomyAugust 1, 2025 at 1:00:00 PM

What it will take for Hong Kong to lead in shipping again

The Development Bureau’s proposal to reclaim 301 hectares—145 near Lung Kwu Tan and 45 in Tuen Mun West—for a “smart and green industrial...

Economy World
Image Credits: Unsplash
EconomyAugust 1, 2025 at 1:00:00 PM

Taiwan welcomes reduced 20% US tariff—but faces growing pressure to offer deeper concessions

Taiwan has just been handed a partial reprieve: the United States will impose a 20% tariff on its exports instead of the previously...

Economy Singapore
Image Credits: Unsplash
EconomyAugust 1, 2025 at 1:00:00 PM

Singapore stock market sell-off reveals deeper crisis of confidence

While headlines focused on the 1.1 percent drop in the Straits Times Index (STI) on July 31, a closer reading of the market...

Economy Singapore
Image Credits: Unsplash
EconomyAugust 1, 2025 at 1:00:00 PM

Trump adjusts reciprocal tariffs ahead of deadline; Singapore expected to retain 10% rate

President Donald Trump’s 2025 tariff overhaul is not a symbolic gesture. It’s a structural realignment that reintroduces trade friction as a core feature...

Economy World
Image Credits: Unsplash
EconomyAugust 1, 2025 at 11:30:00 AM

U.S. expands tariff hikes to dozens of countries

While headlines often zoom in on US–China friction, the more consequential pivot may be Washington’s decision to raise tariffs across a wider swath...

Economy World
Image Credits: Unsplash
EconomyAugust 1, 2025 at 11:30:00 AM

Hong Kong stocks head for first weekly decline in a month amid China growth concerns

Hong Kong stocks just broke their three-week winning streak. On the surface, it’s a mild pullback: the Hang Seng dipped 2.4% for the...

Economy World
Image Credits: Unsplash
EconomyAugust 1, 2025 at 10:30:00 AM

China manufacturing PMI decline signals deeper export strain

China’s June manufacturing PMI dipped to 49.6, slipping below the neutral 50-point mark and snapping a three-month streak of marginal growth. On its...

Economy World
Image Credits: Unsplash
EconomyAugust 1, 2025 at 10:30:00 AM

Oil rises slightly on geopolitical tensions and supply concerns

Oil prices rose modestly this week, but the implications run deeper than market headlines suggest. Brent crude moved past the $84 threshold, with...

Economy World
Image Credits: Unsplash
EconomyJuly 31, 2025 at 12:00:00 PM

What the end of the US-China tariff pause really signals

On August 1, the United States’ pause on so-called “reciprocal tariffs” targeting Chinese imports is scheduled to expire. For Beijing, a short extension...

Economy Malaysia
Image Credits: Unsplash
EconomyJuly 31, 2025 at 11:30:00 AM

US-Malaysia tariff agreement likely following Trump-Anwar call ahead of Aug 1 deadline

Washington’s proposed reduction of a 25% import tariff on Malaysian goods—floated just hours after a call between President Trump and Prime Minister Anwar...

Load More