Oil prices nudged higher in Friday’s Asian session, as traders weighed the economic impact of fresh United States tariffs against heightened geopolitical risks to global crude supplies.
By 3:15 pm AEST (5:15 am GMT), Brent crude futures were up 20 cents, or 0.3%, at $71.90 per barrel. U.S. West Texas Intermediate (WTI) crude gained 18 cents, or 0.3%, to trade at $69.44.
The modest rebound followed a decline of around 1% on Thursday as markets absorbed the potential demand implications of sweeping new U.S. tariffs.
Despite the day’s muted move, Brent is on track for a weekly gain of 4.9%, while WTI is set to rise 6.4%.
The gains follow U.S. President Donald Trump’s threat earlier in the week to impose tariffs on countries purchasing Russian crude - particularly targeting major importers China and India - in a bid to pressure Moscow over its ongoing war in Ukraine.
However, by Friday, investor focus had shifted to Trump’s executive order introducing a wide range of new tariffs, ranging from 10% to 41%, on imports from dozens of countries, including Canada, India, and Taiwan.
The measures are set to take effect from 1 August after those trading partners failed to reach new agreements with Washington.
In a client note, ANZ analysts said: “The market is cautious heading into the weekend’s OPEC meeting. Ever since OPEC announced it would aggressively unwind voluntary production cuts, expectations of a slump in prices have been building.
"Instead, OPEC’s move has been timed perfectly to match with a seasonal bounce in demand.”
There are also signs that the existing U.S. tariffs are beginning to affect inflationary pressures.
Data released Thursday showed that U.S. personal consumption expenditures rose slightly in June compared to the previous month, with tariffs driving up prices on imported items such as household furniture and recreational products.
The inflationary uptick has reinforced views that the Federal Reserve may now delay interest rate cuts until at least October.
Persistently high interest rates could weigh on oil demand by slowing economic growth and raising borrowing costs.
Nonetheless, concerns over potential supply disruptions remain a counterweight. The Trump administration’s renewed threat of imposing 100% secondary tariffs on buyers of Russian crude has added support to oil prices, amid fears it could reduce flows and tighten global supply.
