West Texas Intermediate (WTI), the U.S. benchmark for crude oil, was trading around $70.80 during the early Asian session on Tuesday, continuing its recovery driven by concerns over near-term supply shortages.
The price gain follows a fresh round of U.S. sanctions announced on Monday by the Treasury and State Departments, targeting individuals and companies, including the head of Iran’s national oil company. These sanctions are expected to exacerbate supply tightness, which could support WTI prices in the short term.
However, the outlook remains clouded as traders also watch the evolving trade tensions between the U.S. and its North American neighbors. U.S. President Donald Trump reiterated on Monday that tariffs on imports from Canada and Mexico will go ahead once a temporary delay expires next week. This raises concerns about the potential impact of a global trade war, which could dampen demand for oil and cap further gains for WTI.
Additionally, a potential thaw in U.S.-Russian relations, coupled with the prospect of peace talks in the ongoing Russia-Ukraine conflict, could add downward pressure on oil prices. Any reduction in sanctions on Russia could lead to a full resumption of Russian oil exports, potentially easing supply concerns and limiting WTI’s upside potential.
