Oil prices edge higher amid fears of tighter global supply

SINGAPORE: Oil prices inched up on Wednesday, extending gains from the previous session when they jumped over 3 per cent, as concerns grew over potential disruptions to global supply following a warning from US President Donald Trump to Russia.

By 0048 GMT, Brent crude had risen 14 cents, or 0.19 per cent, to trade at $72.65 a barrel, while US West Texas Intermediate (WTI) crude saw a marginal gain of 2 cents, or 0.03 per cent, to reach $69.23. Both benchmarks closed Tuesday at their highest levels since June 20.

The rally came after Trump sharply shortened his timeline for Russia to end its war in Ukraine. He warned that if Moscow failed to make progress within 10 to 12 days, the US would impose 100 per cent secondary tariffs on countries continuing to trade with Russia, replacing an earlier 50-day window.

Analysts at ING said such sweeping tariffs could significantly reshape global oil flows, as major importers of Russian crude, especially US allies, may be forced to scale back purchases. “Even if OPEC+ responds by easing some of its production cuts, the market could still face a shortfall under extreme conditions,” they noted.

US Treasury Secretary Scott Bessent, speaking in Stockholm during trade talks with the EU, confirmed Washington had warned China, the largest buyer of Russian oil, about possible heavy tariffs if it kept importing from Moscow. While China is expected to resist such measures, JP Morgan analysts said India has signalled willingness to comply, which could threaten up to 2.3 million barrels per day of Russian oil exports.

Meanwhile, a separate deal between the US and EU appears to have defused a potential trade war, with Washington agreeing to cap tariffs on European goods at 15 per cent. This development helped ease investor concerns about the broader impact of trade tensions on the global economy, giving oil prices an added boost.

In Venezuela, the state oil company PDVSA and its foreign partners are still awaiting US approvals to resume operations under sanctions. If granted, these permissions could bring some Venezuelan crude back to the market, potentially relieving upward pressure on prices.