Oil prices remained near a two-week high on Tuesday as geopolitical instability in the Middle East heightened concerns over supply disruptions, while China’s latest economic stimulus measures signaled potential growth in fuel demand.
Brent crude rose 25 cents, or 0.4%, to $71.32 per barrel by 10:43 a.m. EDT (14:43 GMT), while U.S. West Texas Intermediate (WTI) crude climbed 17 cents, or 0.3%, to $67.75 per barrel. Both benchmarks remained on track for their highest closing levels since early March.
Concerns over supply disruptions intensified as the U.S. government vowed to continue operations against Yemen’s Houthi militants, citing their repeated attacks on ships in the Red Sea. The U.S. also warned Iran against supporting the Houthis, raising fears of broader regional instability that could impact global oil flows.
Iran, a key OPEC member, produced approximately 3.3 million barrels per day (bpd) of crude in 2024, according to the U.S. Energy Information Administration (EIA).
Further complicating the supply outlook, a blast struck Nigeria’s Trans Niger oil pipeline, which has a transport capacity of 450,000 bpd to the Bonny export terminal. Meanwhile, Israeli airstrikes in Gaza intensified, following the collapse of a ceasefire agreement that had held since January.
On the demand side, China’s economic outlook provided some support to oil markets. Official data showed an increase in retail sales in January and February, a positive signal for policymakers attempting to boost domestic consumption despite rising unemployment and weaker factory output.
In the U.S., economic concerns persisted as retail sales posted only a marginal rebound in February. Tariffs and federal government job cuts added to economic uncertainty, with global energy demand potentially affected.
The Organisation for Economic Co-operation and Development (OECD) warned that U.S. trade policies could dampen growth in North America and reduce global energy consumption.
Looking ahead, market participants are awaiting key U.S. oil inventory data. The American Petroleum Institute (API) is set to release its report on Tuesday, followed by the U.S. Energy Information Administration (EIA) on Wednesday. Early forecasts indicate a build of approximately 0.9 million barrels in U.S. stockpiles for the week ending March 14, compared with a 2.0 million barrel draw in the same period last year.
Meanwhile, OPEC+ remains committed to its planned output increase in April. Russia, a major OPEC+ ally, produced 9.2 million bpd in 2024, while Kazakhstan, another coalition member, faced pressure from Western oil firms to scale back production to align with the group’s quotas.
Oil markets are also monitoring potential developments from ongoing U.S.-Russia discussions regarding a ceasefire in Ukraine. Any agreement that leads to the easing of sanctions on Russian crude exports could impact global oil supplies and pricing trends.
