Oil steadies in choppy trading on tariff uncertainty, OPEC+ hike plans

HOUSTON – Oil settled largely unchanged in choppy trade on Thursday, with global benchmark Brent closing below USD 70 a barrel under pressure from tariffs between the US, Canada, and China, and plans by OPEC+ to raise output.

Brent futures settled up 16 cents, or 0.2%, at USD 69.46 a barrel. US West Texas Intermediate crude futures gained 5 cents, or 0.1%, to settle at USD 66.36.

On Wednesday, Brent hit USD 68.33, its weakest since December 2021, after a larger-than-expected build in US crude inventories further pressured oil after OPEC+’s hike in output quotas for the first time since 2022 and new US tariffs enacted on Tuesday.

“The OPEC news of adding barrels next month, along with a Russian/Ukraine peace deal now looking more promising and a flip/flop of tariffs is keeping crude in a volatile trade,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Russia said it will seek a peace deal in Ukraine that safeguards its own long-term security and will not retreat from the gains it has made in the conflict.

On Thursday, US President Donald Trump exempted goods from Canada and Mexico under a North American trade pact for a month from the 25% tariffs that he imposed this week, the latest twist in fast-shifting trade policy that has whipsawed financial markets and business leaders.

A source familiar with the discussions said that Trump could eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, that comply with existing trade agreements.

Chinese officials have flagged that more stimulus is possible if economic growth slows, seeking to support consumption and cushion the impact of an escalating trade war with the US

Helping boost prices, meanwhile, the US will exert a campaign of maximum pressure of sanctions on Iran to collapse its oil exports and put pressure on its currency, Treasury Secretary Scott Bessent said.

The US is reviewing all existing sanctions waivers that provide Iran any degree of economic relief and urging the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible, State Department spokesperson Tammy Bruce said.

Downside risks on demand will likely be greater than supply-side risks at this point with the additional oil coming from OPEC, said Scott Shelton, energy analyst at TP ICAP.

“Spare capacity can offset supply losses, but there is no way to fix demand, which should flounder under the weight of sanctions and underperform,” Shelton added.

The OPEC+ producer group, comprising the Organization of the Petroleum Exporting Countries and allies including Russia, decided on Monday to increase output for the first time since 2022.

One OPEC+ delegate, commenting on the market’s reaction to Monday’s decision, said the price drop looked overdone and hoped that the market was now on a “gradual recovery.”

(Reporting by Paul Carsten in London, additional reporting by Alex Lawler and Ahmad Ghaddar in London, Siyi Liu in Singapore; Editing by Marguerita Choy and David Gregorio)