Oil prices edged higher as industry data signaled a significant drop in U.S. crude stockpiles and geopolitical developments added uncertainty. Brent crude rose 0.6% to $72.83 per barrel, while West Texas Intermediate reached $69.42 per barrel (+0.6%).
According to the American Petroleum Institute, U.S. inventories declined by 4.6 million barrels last week, the largest draw since November if confirmed by official data.
Additionally, concerns over tighter supplies arose after President Trump authorized tariffs on countries importing Venezuelan oil, under the 1977 International Emergency Economic Powers Act. Venezuela, heavily reliant on oil exports, could see production cut by approximately 200,000 barrels per day if Chevron withdraws from operations as mandated by the U.S. government. China, Venezuela’s largest buyer, is already facing tariffs from Washington.
Despite the supply concerns, oil prices were capped by reports of a temporary ceasefire between Russia and Ukraine in the Black Sea, aimed at ensuring safe navigation. The U.S. agreed to push for some sanctions relief on Moscow, though both Kyiv and the Kremlin expressed doubts about long-term compliance.
Market sentiment remains volatile as traders hedge against potential price spikes due to sanctions and geopolitical risks. While analysts expect sustained supply constraints, Russia has successfully redirected its oil exports in recent years, mitigating the impact of sanctions. Official U.S. crude inventory data, set for release on Wednesday, will provide further clarity on supply dynamics.