Oil & Gas

OIL PRICES CLIMB AMID ISRAEL-DOHA STRIKE AND TRUMP’S TARIFF PUSH, BUT OUTLOOK REMAINS WEAK

Oil prices rose on Wednesday after Israel launched a rare strike targeting Hamas leadership in Doha, Qatar, heightening geopolitical tensions in the Middle East. The move raised fears of potential disruptions to supply chains across the oil-rich region. Simultaneously, U.S. President Donald Trump urged the European Union to impose 100% tariffs on China and India over their continued purchases of Russian oil—an escalation aimed at further isolating Moscow’s energy exports. However, concerns over global demand and a weak market outlook limited the extent of gains.

Brent crude futures rose 61 cents, or 0.92%, to $67 a barrel by 0620 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 61 cents, or 0.97%, to $63.24. Market analysts attributed the initial price spike to rising geopolitical risk premiums. “This increases the fears of a short-term supply crunch if OPEC+ members’ oil production facilities are hit by Israel,” said Kelvin Wong, senior market analyst at OANDA. Despite an early surge of nearly 2% after the strike, oil prices retreated once the U.S. reassured Qatar that such attacks wouldn’t recur, and no immediate supply disruption was observed.

Market reaction to Trump’s tariff push was similarly cautious. Trump has called on the EU to target China and India—two of the largest buyers of Russian oil—with punitive tariffs, in an effort to pressure President Vladimir Putin’s war machine. Analysts at LSEG noted that if such secondary sanctions are enacted, it could tighten global oil supply and support prices. Still, uncertainty remains around how aggressively Trump will act, as further pressure on global oil flows could stoke inflation and complicate Federal Reserve efforts to lower interest rates.

Despite the geopolitical headlines, the overall supply outlook remains bearish. The U.S. Energy Information Administration (EIA) warned that global crude prices may come under sustained pressure in the months ahead due to rising inventories and increased output from OPEC+. While traders anticipate a possible interest rate cut by the Federal Reserve in the coming week—which could support oil demand—many remain skeptical that it will be enough to offset the risks posed by oversupply and weakening global economic momentum.