Oil prices edged higher on Wednesday as concerns over supply disruptions in Russia and the U.S. weighed on the market.
Investors are also awaiting further clarity on sanctions as the U.S. attempts to negotiate a resolution to the Ukraine war.
Brent crude futures rose 64 cents, or 0.8%, to $76.48 per barrel by 1339 GMT, marking a third consecutive day of gains. U.S. West Texas Intermediate (WTI) crude for March delivery increased 75 cents, or 1%, to $72.60, up 2.6% from the previous close before Monday’s U.S. holiday. The March contract expires on Thursday, with the more active April contract rising 70 cents, or 1%, to $72.53.
Supply concerns have intensified following drone attacks on Russian oil infrastructure. Russia reported that oil flows through the Caspian Pipeline Consortium (CPC), a key export route for Kazakhstan’s crude, fell 30-40% on Tuesday after a Ukrainian drone attack on a pumping station. A 30% reduction equates to an estimated loss of 380,000 barrels per day (bpd).
In the U.S., cold weather has further threatened oil supply. The North Dakota Pipeline Authority estimated that production in the state could drop by as much as 150,000 bpd due to freezing temperatures.
There is also speculation that OPEC+ may reconsider its planned supply increase in April, with expectations that the group could extend its current output cuts.
Meanwhile, discussions between Russia and the U.S. in Riyadh have raised questions about whether sanctions on Russian oil could be phased out, though no immediate policy changes have been announced. Any easing of sanctions is unlikely to significantly increase Russian crude oil exports, as current production remains aligned with OPEC+’s 9 million bpd production target.
In the Middle East, Israel and Hamas are set to begin indirect negotiations on a second stage of a Gaza ceasefire deal. A ceasefire could ease oil price pressure by reducing the risk of supply disruptions in the region.
Further weighing on oil demand, the Trump administration has announced tariffs on automobiles, semiconductors, and pharmaceutical imports, which could slow global economic growth and impact fuel consumption. Trump stated on Tuesday that auto tariffs would be “in the neighborhood of 25%”, with similar duties planned for key tech and pharmaceutical imports.
