WTI crude price dips below $70 as tariff risks and supply concerns impact oil price outlook
WTI trades near $69 as U.S. tariffs and supply headlines drive oil price volatility
West Texas Intermediate (WTI) crude oil slipped to around $69.20 per barrel on Thursday, pulling back from a three-day rally as investors reassessed the impact of U.S. President Donald Trump's newly announced 25% tariffs on auto imports. The tariffs, which take effect April 2, have reignited global trade tensions and sparked fresh uncertainty across commodity markets.
Analysts are split on the broader impact of auto tariffs on oil demand. While some argue that higher vehicle prices could delay the adoption of fuel-efficient technologies—supporting longer-term crude consumption—others point to the possibility of near-term demand destruction as global growth faces renewed trade-related headwinds.
USOIL price dynamics (Feb 2025 - Mar 2025) Source: TradingView.
Sanctions and supply dynamics drive volatility
Tightening global supply conditions also drove the oil price down. The U.S. Energy Information Administration (EIA) reported a significant drop in crude inventories last week, with stockpiles falling by 3.34 million barrels—the sharpest weekly decline since December. Gasoline inventories also dipped, reinforcing signs of robust domestic demand.
On the geopolitical front, India’s Reliance Industries, the operator of the world’s largest oil-refining complex, reportedly plans to halt imports of Venezuelan crude. The move follows heightened U.S. pressure on buyers of sanctioned oil from Venezuela and Iran, further constraining the global supply pool. Meanwhile, discussions between the U.S., Russia, and Ukraine may lead to partial easing of sanctions on Russian crude, a factor currently exerting slight downward pressure on prices.
Looking ahead, OPEC+ is expected to meet in early May, with speculation mounting over a potential increase in production quotas. Iraq’s recent announcement to boost capacity beyond 6 million bpd by 2029 also adds to medium-term supply concerns.
Previously, we emphasized WTI’s sensitivity to both geopolitical headlines and inventory data. With prices hovering below $70, the balance between trade policy shocks and physical supply constraints remains the critical driver. The current setup favors a choppy near-term outlook as traders weigh conflicting signals.
