Oil prices climbed to a two-week high on Tuesday as sanctions on Russian and Iranian oil exports, along with rising tensions in the Middle East, fueled supply concerns. This increase outweighed worries that new trade tariffs could push inflation higher and slow global economic growth.
Brent crude rose $1.13, or 1.5%, to settle at $77.00 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $1.00, or 1.4%, closing at $73.32. Both benchmarks recorded their third consecutive day of gains, reaching their highest levels since January 28.
“With the U.S. bearing down on Iranian exports and sanctions still biting into Russian flows, Asian crude grades remain firm and underpin the rally from yesterday,” said PVM oil analyst John Evans.
U.S. sanctions targeting tankers, producers, and insurers have significantly disrupted Russian oil shipments to major buyers like China and India. Additional U.S. sanctions on networks transporting Iranian oil to China have also contributed to supply concerns.
Further uncertainty stems from geopolitical tensions in the Middle East. Israeli Prime Minister Benjamin Netanyahu warned that if Hamas did not release Israeli hostages by noon on Saturday, a fragile ceasefire in Gaza would end. President Donald Trump also threatened to cancel the ceasefire and “let hell break out” if hostages were not freed.
Despite these supply concerns, oil price gains were limited by fears that Trump’s latest trade tariffs could weaken global economic growth and reduce energy demand. The U.S. president raised tariffs on steel and aluminum imports to 25%, sparking backlash from Mexico, Canada, and the European Union.
The U.S. Energy Information Administration (EIA) projects that both global oil supply and demand will reach record highs in 2025 and 2026. Meanwhile, analysts expect U.S. oil stockpiles to rise by about 3 million barrels, marking a third consecutive week of inventory builds.