Oil prices hedged higher this week supported by a complex mix of geopolitical risks, tightening trade policies, and anticipation surrounding the U.S. Federal Reserve’s upcoming interest rate decision.
After surging more than 3% on Tuesday, both major crude benchmarks saw modest gains in early Asian trade. At the time of writing, WTI crude was up slightly at $69.24 per barrel, while Brent crude also edged higher to $72.66 per barrel, marking their highest levels since June 22.
The Tuesday rally was largely triggered by mounting pressure from the United States on Moscow to end the war in Ukraine, with former President Donald Trump issuing a shortened ultimatum for Russia to show meaningful progress or face new secondary sanctions. These measures would include 100% tariffs on trading partners continuing to import Russian oil, a move that ING analysts said “would lead to a dramatic shift in the oil market.”
Such tariffs are expected to deter major importers like China and India. While China would be more likely to resist U.S. pressure, India has signalled its willingness to comply, potentially putting as much as 2.3 million barrels per day of Russian Meanwhile, in Venezuela, foreign oil partners are still waiting on U.S. approvals to resume sanctioned operations—a potential wildcard for global supply dynamics if those barrels re-enter the market.
A stronger dollar, which gained ahead of the Fed decision, tends to put downward pressure on crude by making it more expensive for foreign buyers.
Other economic data due this week includes nonfarm payrolls on Friday(today), China’s PMI numbers and the Bank of Japan’s interest rate decision, all of which could influence global energy demand projections.
Fuel card prices are to remain fairly static as we head into August.
