Oil Heads for Steepest Weekly Drop Since October on Tariff Fears

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Oil Prices Are on Track for Steepest Weekly Decline Since October Amid Ongoing U.S. Tariff Policies Uncertainty

Oil prices displayed minimal movement on Friday, yet were on course for their most significant weekly drop since October. This decline is attributed to the prevailing uncertainty surrounding U.S. tariff policies, which is generating apprehensions regarding demand growth, coinciding with planned production increases from major oil-producing nations.

Brent crude futures experienced a marginal increase of 13 cents, or 0.19%, reaching $69.59 per barrel by 02:17 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude futures saw a slight rise of 8 cents, or 0.08%, to $66.44 per barrel.

However, when considering the weekly performance, Brent crude is projected to fall by 4.9%, marking its largest weekly decrease since the week of October 14th. WTI is also expected to decline by 4.8%, mirroring its most substantial weekly drop since the same period.

Financial markets, including the oil sector, have been subject to considerable volatility due to the evolving trade policies of the U.S., the world’s leading oil consumer.

On Thursday, U.S. President Trump announced the suspension of 25% tariffs on the majority of goods from Canada and Mexico until April 2nd. However, tariffs on steel and aluminum are scheduled to take effect on March 12th as planned. The amended order does not fully address Canadian energy products, which are subject to a separate 10% levy.

These tariffs are widely perceived as a constraint on economic expansion, consequently impacting oil demand. Furthermore, the ambiguity surrounding these policies is causing delays in business decisions, which also has a negative effect on the economy.

Brent crude prices reached their lowest point since December 2021 on Wednesday, following an increase in U.S. crude inventories and the decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to raise their output quotas.

OPEC+ announced on Monday that it would proceed with a planned April output increase, adding 138,000 barrels per day to the market. Some of the downward pressure on prices has been mitigated by reports that the U.S. is considering actions to limit exports from a key OPEC producer.